Gresik sale to go through DPR

Gresik sale to go through DPR

Berni K. Moestafa, The Jakarta Post, Jakarta

Knowing that a lack of political support could prove costly
when asset sales fail, the government would now seek legislators'
consent for the troubled sale of PT Semen Gresik, a senior
government official said on Wednesday.

Ministry of State Enterprises' privatization and restructuring
director Aloysius Klik Roe said the state-owned cement company
had been included in this year's privatization master plan.

The plan outlines how and what state companies the government
plans to sell this year.

"Semen Gresik is part of it (the plan), but its sale will need
the approval of the House of Representatives (DPR)," Aloysius
told reporters after a discussion on privatization sponsored by
Semen Gresik.

He said the government expected to finalize the plan soon. The
government had earmarked Semen Gresik for sale in the first half
of 2002, he said.

Plans to relaunch the sale of Semen Gresik has dispelled some
of the uncertainties that has shrouded it since a planned sale to
Mexico's Cemex SA de CV fell through last December.

Legislators have mixed views as to whether or not Semen Gresik
should be sold. Renewing talks with legislators now might spark
fresh rounds of protests against the divestment plan.

Last year, Semen Gresik workers protested and rejected the
sale which led to the collapse of the deal with Cemex.

Under what is known as a put option, the government had the
right to sell a 51 percent stake to Cemex.

If realized, the deal would have earned the government US$525
million, while acting as a catalyst for the return of foreign
investors.

However the government let the deal expire, even after it had
been extended by about three months to December last year.

Moving in to block the sale were workers from Semen Gresik's
two units, PT Semen Padang and PT Semen Tonasa. Their protests
were supported by local politicians in Padang and Tonasa.

But tipping the scale that killed the deal was Semen Gresik's
workers joining the protests after three years of silence.

The government set up the deal in 1998, when Cemex purchased
11 percent of Semen Gresik. It later increased its holding to 25
percent.

"We've been delaying the sale, which doesn't mean we're
canceling it," Aloysius said.

Tuesday's reshuffle among Semen Gresik's top management fueled
speculation that the government was seeking the company's full
support for the plan.

Climbing to the top was Semen Gresik's former finance director
Satriyo, who replaced Urip Timuryono as its president director.

The new finance director is newcomer Hatanto Reksodipoetro. He
is also the director general for international cooperation at the
Ministry of Industry and Trade.

Cemex retains its influence in the company with PT Cemex
Indonesia president Francisco Noriega marking his second term as
Semen Gresik's vice president director.

The new management declined to say whether or not they
supported the privatization of Semen Gresik.

Satriyo said he would have to wait until after the government
and legislators decided their positions.

But he urged the government to make up its mind soon. "I hope
to eliminate this uncertainty that has stirred worries among our
employees," he said.

He also thought it unnecessary to force unruly workers into
accepting the privatization plan if the government asked it to.

"Our employees are reasonable people."

Satriyo played down fears of strikes, saying strikes would
only be partial and would not disrupt the company's operations.

Head of Semen Gresik's labor union, Tjipto Sumarsono said he
was also waiting for the new management to explain its stance.

He was confident of Semen Gresik's workers receiving continued
support from the management to protest the privatization plan.