P&O Ports wins stake in privatized Pelindo III

P&O Ports wins stake in privatized Pelindo III

JAKARTA (JP): The government announced on Friday that P&O
Ports, a division of P&O Australia Ltd, had won the bid for a 49
percent stake in a state-owned terminal container operator in
East Java.

State Minister of the Empowerment of State Enterprises Tanri
Abeng said in a statement that P&O Ports paid US$173.76 million
for its investment as a strategic partner in PT Terminal
Petikemas Surabaya (TPS). P&O will have a 20 year concession to
operate the container terminal in Tanjung Perak Port, Indonesia's
second largest port with a capacity of over 740,000 twelve-feet
equivalent units (TEUs) in 1998.

He said the regional port authority of East Java, PT Pelindo
III, and its employee cooperative, would maintain a majority 51
percent stake, and would retain the right to appoint both the
president and president commissioner of TPS.

"This is the first company to be privatized in Indonesia's
1999/2000 fiscal year and was completed just prior to the
upcoming June election," Tanri said.

P&O Ports outbid offers submitted by Stevedoring Services of
America, ICTSI of the Philippines and Port of Marseilles.

"Pelindo III is excited about having P&O Ports as a strategic
partner, and expects P&O to contribute significant management and
technology expertise in developing TPS into a world-class
operator," said Pelindo III president commissioner Soentoro.

Agus Prodjosasmito, president of PT Danareksa Securities, one
of the advisors for the privatization program, said TPS planned
to invest over $300 million in capital expenditure and
development programs at the Tanjung Perak Port area in the first
10 years of the 20 years concession.

Pelindo III is the first privatization program launched by the
government in the 1999/2000 fiscal year.

The government plans to raise US$1.5 billion in the fiscal
year ending in March 2000, through the privatization of 14
companies.

The companies include state international telecommunications
firm PT Indosat, domestic telecommunications company PT Telkom,
mining firms PT Aneka Tambang and PT Tambang Timah, and
plantation companies PT Perkebunan III and PT Perkebunan IV.

The government only managed to privatize three companies in
the previous fiscal year compared to an initial target of 12
companies.

Less than half of the targeted Rp 1 billion was raised. (rei)