Opponent of Semen Gresik sale gain new supporter

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.