Jasa Marga plans to sell 40 percent staje in in November
Rendi A. Witular, The Jakarta Post, Jakarta
State-owned toll road operator PT Jasa Marga may sell 40 percent of its shares to the public via an initial public offering (IPO) in November after the conclusion of the general election, a senior official said.
Jasa Marga president Syarifuddin Alambai said the company's recent general shareholders meeting had agreed in principle to the plan to become a publicly listed company, and that now the government's privatization committee was making preparations to realize the plan.
"Our target for the IPO is November... We hope to gain around Rp 1.5 trillion (US$178 million) in proceeds from selling 40 percent of our shares to the public," said Syarifuddin on Tuesday.
Syarifuddin was talking to the press on the sidelines of a hearing with the House of Representatives Commission IV for public infrastructure, transportation and communications.
He explained that most of the proceeds would be used for the company's working capital in order for the company to participate in the government's 1,486-kilometer toll road project that would link Merak in Banten with Banyuwangi in East Java. Part of the proceeds would also be used to refinance the company's debt.
The toll road project, which is estimated to cost Rp 77.3 trillion, is divided into three phases with the first phase the construction of a 64-kilometer toll road for the unfinished Jakarta outer ring road (JORR) and the Cikampek-Padalarang stage II, in West Java.
The first project is estimated to cost Rp 3.25 trillion.
The second phase will be the construction of a 356-kilometer road, comprising a road that will connect Cikampek with Cirebon, Semarang with Demak, Surabaya with Mojokerto and Madura and SS Waru and Tanjung Perak. This stage will cost around Rp 16.57 trillion.
The third phase will be the construction of a 1,066-kilometer road at an estimated cost of Rp 57.5 trillion. The JORR part II project, Bogor ring road, Probolingo-Banyuwangi, Solo-Mantingan and Pejagaan-Pemalang are included in this category.
All of the projects are scheduled to start this year and continue until 2009.
Elsewhere, Syarifuddin said that the company had recorded a 38 percent increase in revenue to around Rp 1.3 trillion last year from around Rp 941 billion in 2002, with an increase in net profit of about Rp 250 billion from Rp 165 billion in 2002.
As for this year the company expected toll road traffic revenue to increase by 5 percent to Rp 4.7 billion per day from Rp 4.5 billion last year, with a consolidated revenue this year targeted to reach around Rp 1.7 trillion, he said.
Jasa Marga manages 383 kilometers of the country's total 520 kilometers of toll roads. The remaining roads are managed by other investors.
The government is relying on proceeds from the privatization program to help cover the state budget deficit, which for this year has been set at Rp 24.4 trillion or 1.2 percent of the country's gross domestic product (GDP).
Syarifuddin's plan to use all of the IPO proceeds for the company's benefit will likely be challenged by the government.