Semen Gresik privatization delayed
The Jakarta Post, Jakarta/Surabaya
State Minister of State Enterprises Laksamana Sukardi said on Monday that the government was unlikely to complete the sale of the state-owned cement maker PT Semen Gresik to Mexico's Cemex SA de CV as planned amid continuing protests from various quarters.
"I think we cannot say anything for sure at the moment. Looking at the present conditions, it would be very hard to execute it (this year)," Laksamana told reporters.
Separately, Surya Dharma Ali, chairman of the House of Representatives Commission V on trade and industry, said that in an effort to cool things down, the privatization program would be delayed.
"There has been an agreement between the House and government that there won't be any decision on Semen Gresik until after January."
The government had planned to complete the sale of a 51 percent stake in the publicly listed Semen Gresik to the Mexican cement company before the end of this year to raise badly needed cash to help finance the 2001 state budget deficit.
The privatization program not only directly affects government finances, but is seen as a crucial measure to help revive investor sentiment in the ailing economy.
Meanwhile, shares in Semen Gresik dropped on Monday by 9.2 percent to Rp 5,450 each, a level not seen since June, due to the delay in the planned sale.
Laksamana was referring to the widespread street protests in local provinces opposed to the deal, which will allow foreign control of the publicly listed company and its subsidiaries PT Semen Padang and PT Semen Tonasa.
On Monday, around 3,000 employees of Semen Gresik staged a rally at the East Java Provincial Legislative Council in Surabaya asking the government not to sell its majority stake to a foreign investor. A similar protest had occurred last week in a separate town in the province.
Responding to the protest, a local legislator from the Golkar party, Edy Wahyudi, noted that the protesters' demands were rational and he would pass on their requests to the central administration.
Similar protests led by some local politicians and local community leaders have also been staged in West Sumatra and North Sulawesi, the site of Semen Padang and Semen Tonasa respectively.
The delay in the deal shows the extent to which political infighting has hampered attempts to raise revenue as well as to regain investor' confidence.
Laksamana said that the failure to wrap up the deal as previously scheduled meant that this year's revenue target from privatization proceeds could not be met.
The government is set to finish the year with a total earnings from the sale of state-owned assets amounting to Rp 3.5 trillion, or Rp 3 trillion short of the projected Rp 6.5 trillion.
The earnings came from the sale of 11.9 percent shares in state-owned telecommunications company PT Telkom last week and 40 percent shares in plantation firm Socfindo, the proceeds of which contributed Rp 3.12 trillion and Rp 400 billion respectively to government coffers.
Elsewhere, Laksamana said the government would continue to hold negotiations with Cemex, Semen Gresik, and its two units so as to keep the new scheme alive.
He said that the government had invited all concerned parties, including the local legislature, governors of Central Sumatra and North Sulawesi as well as Cemex to meet to help facilitate the sale.
Laksamana earlier said that the government would have to seek other buyers if Cemex backed out from the Semen Gresik purchase plan.