Six foreign companies bid for stake in Pelindo's unit

JAKARTA (JP): Six giant foreign shipping and port operators have submitted offers to buy a 49 percent to 51 percent stake in the newly established PT Jakarta International Container Terminal (JICT), a unit of state-owned port operator PT Pelindo II.

Sofyan Djalil, an assistant to the State Minister for the Empowerment of State Enterprises, said on Thursday that the six qualifying bidders are Denmark's A.P. Moller Group which operates Maersk Lines, Grosbeak PTE Ltd which is a unit of Hongkong's conglomerate Hutchison Whampoa, Australia's P&O Ports, Stevedoring Services of America which has a business cooperation with local shipping company PT Samudera Indonesia, Taiwan's Peony Investment S.A., a unit of the Evergreen Group, and the Philippines' International Container Terminal Services Inc.

Herwidayatmo, deputy minister for privatization and corporate restructuring, said that the bidders would undertake a due diligence early next month, and are expected to offer their final bids on January 15, 1999.

"The government privatization committee and the financial advisers will then make a final evaluation," he said at a press conference, adding that the whole bidding process was expected to be completed by the second week of February.

Herwidayatmo said that the government had yet to decide the proportion of shares to be privatized in JICT, but said that it would be in the range of 49 percent to 51 percent.

"If the government sold a majority stake it would still retain a golden share," he said.

Pelindo II president Herman Prayitno said that JICT operates two container terminals with a total capacity of 1.5 million TEUs in the country's busiest port, Tanjung Priok in Jakarta.

He said that the two terminals contributed some 50 percent to Pelindo's 1997 total profit.

Pelindo initially planned to expand the terminal's capacity to 2.1 million TEUs, but with the entry of foreign strategic investors the capacity could be boosted to some 2.7 million TEUs, he added.

He expected that the winning bidder would be a strategic investor which could boost JICT's productivity and profit, provide the best service to customers, and expand capacity.

Asked whether there would be a change in tariff with the entry of the foreign investors, he said: "Don't worry, there will be no change in tariff. We'll stick to the current tariff based on Law No. 21/1995."

He admitted, however, that the decision governing tariffs lies in the hands of the regulator.

Herman also said that the sale of JICT would not have a detrimental impact on Pelindo's profitability since the company still has 11 other large ports including the one in Padang, West Sumatra, which is expected to be busy with the rising export activities of cement maker PT Semen Padang.

Pelindo is part of the five state-owned companies to be privatized by the government in the remaining period of the current fiscal year ending in March 1999.

The government had earlier privatized cement maker PT Semen Gresik.

The government initially planned to privatize 12 state-owned companies in the fiscal year to raise some US$1.5 billion, but scaled that down to only six companies citing a bearish market condition. (rei)