IBRA can't fulfill govt request for higher proceeds

The Jakarta Post, Sukabumi, West Java

The Indonesian Bank Restructuring Agency (IBRA) said it would not be able to collect a more money to help finance the 2003 state budget deficit, which will be wider than initially projected.

IBRA director of finance Harry A.S. Sukadis said on Friday that the agency could only contribute around Rp 18 trillion (US$2.17 billion) in cash to the state this year.

The government had asked IBRA to collect more money to help finance the budget deficit, which is estimated to widen to 2 percent of gross domestic product (GDP) from the initial projection of 1.8 percent of GDP.

Minister of Finance Boediono expected the agency to contribute up to Rp 21 trillion to the state this year by converting bonds the agency redeemed from banks into cash.

In addition to the Rp 18 trillion cash target, IBRA is also targeted to recover around Rp 8 trillion worth of bonds from recapitalized banks. The government injected massive amounts of bonds into troubled banks to help recapitalize them.

"But raising an additional Rp 3.3 trillion by converting bonds to cash is too difficult for us. And we think the government would understand," Harry told reporters during a workshop organized by the agency.

IBRA, which was set up in 1998, took over various assets from troubled banks and their owners. The agency is mandated to sell the assets to raise cash to contribute to financing the budget deficit.

Harry said that according to the initial plan, IBRA was supposed to have already submitted the Rp 18 trillion cash by September, but due to delays in a number of asset sale programs, the agency could only fulfill the cash target next month.

As of August, the agency could only raise around Rp 10 trillion in proceeds.

"We will try hard to get the remaining Rp 8 trillion by October," Harry said.