Opponent of Semen Gresik sale gain new supporter

Adianto P. Simamora, The Jakarta Post, Jakarta

The labor union in the state-owned cement maker PT Semen Gresik gained the political support on Tuesday of the Speaker of the People's Consultative Assembly (MPR), Amien Rais, in its bid to foil the government's plan to sell a majority stake in the company to Mexico's cement giant, Cemex SA de CV.

Speaking to reporters following a meeting with officials of the Semen Gresik labor union at the MPR, Amien urged the government to scrap the key privatization program.

"I don't agree with the government's plan to sell Gresik because it runs against the nation's interests," said Amien, who is also chairman of the National Mandate Party (PAN), without giving any clear reasons for his statement.

Separately, State Minister for State Enterprises Laksamana Sukardi said on Tuesday that the government would go ahead with the sale plan.

Asked to comment on Amien's statement, Laksamana was quoted by Detik.com online as saying he would contact Amien to seek an explanation of the matter.

The labor union, together with certain politicians in West Sumatra and South Sulawesi, respectively the home bases of Semen Gresik subsidiaries PT Semen Padang and PT Semen Tonasa, managed to foil the privatization program last year, causing the government to fail to meet the 2001 privatization proceeds target of Rp 6.5 trillion (about US$628 million).

Although the protest over the Semen Gresik privatization program may indicate growing sentiment opposing foreign control of local assets, many say that the resistance has been orchestrated by politicians and corrupt officials who treat Semen Gresik and its subsidiaries as their cash-cows.

The government has planned to sell a 51 percent stake in Semen Gresik to Cemex. It is part of the government's privatization program aimed at raising cash to help finance the state budget deficit.

The Semen Gresik privatization program is being closely watched by foreign investors, including the International Monetary Fund and other multilateral donors.

Economists have said that a successful sale of Semen Gresik would not only provide fresh money for the cash-strapped government but would also help revive foreign investor confidence in the ailing economy.

The government now aims to complete the Semen Gresik privatization program in the first semester of this year. Other state-owned enterprises up for sale during the same period include pharmaceutical firms PT Indofarma and PT Kimia Farma, and international telecommunications firm PT Indosat.

The government plans to raise around Rp 3.5 trillion (about US$350 million) in the first semester of this year as part of the overall privatization target of Rp 6.5 trillion in 2002.

Last year, the government only raised around Rp 3.5 trillion in privatization proceeds.