Some $10 billion in corporate debts restructured: Rizal

JAKARTA (JP): Coordinating Minister for Economic Affairs Rizal Ramli estimated on Friday that some US$10 billion in corporate overseas debt had been restructured outside the mediation of the Jakarta Initiative Task Force (JITF).

Rizal said that he had asked the finance ministry, the Indonesian Bank Restructuring Agency (IBRA) and Bank Indonesia to compile the data and consolidate it into the total amount of corporate overseas debts that have been restructured.

"There are some corporate overseas debts that have been restructured outside JITF," he told reporters on the sidelines of the 14th congress of the National Private Banks Association (Perbanas).

Rizal explained that the debts which had been restructured outside the JITF mediation process were those owed by local joint venture operations of multinationals, particularly Japanese firms.

"If we consolidate this, I'm sure there is quite a lot of corporate debts which have been restructured. And if this figure can be announced, it will help improve our credit rating," he said.

He said that he planned to go to New York at the end of September to meet foreign investors and credit rating agencies to inform them about the latest developments in the economy and corporate debt restructuring.

He said that he would also ask the rating agencies to come to Indonesia in the middle of October to make a "technical review."

Restructuring the country's $70-odd billion corporate overseas debts has been one of the core economic programs of the government to help revive investor confidence.

The government launched JITF to provide a mediation facility between debtors and creditors to reach debt restructuring agreements.

Some $5 billion of corporate overseas debts have been restructured via JITF. The task force expects to help restructure another $3-5 billion by the end of this year.

The strategic objective is to restructure a total of $12 billion debt by April 2001.

Elsewhere, Rizal said that the government was planning to retender several infrastructure projects including the stalled subway project in Jakarta, the double-track railway project linking East Java and Jakarta, and the ferry system in Kalimantan.

"The projects will not be financed through state budget, but equity-based financing," he said.

"It is impossible to rely only on the budget and on loans and have an economic recovery, it must be an equity-based recovery," he added.

He said that the policy of the new economic team was to finance the development of infrastructure projects through equity-based financing instead of loan-based financing, although many infrastructure projects in the country were actually bankable and economically feasible.

He said that in the past many were not bankable because the cost had been marked up to accommodate the issuance of "unpaid shares" to the family and cronies of former president Soeharto giving them shares in the project without having to inject any cash or capital.

He stressed that such "unpaid shares" did not exist under the new government.

He pointed out as an example that the retender of an airport project in Surabaya, East Java, had enabled the government to reduce the cost of the project by $500 million.

Rizal also said that there was already some excitement among foreign investors to resume investing in Indonesia.

He pointed out that he had been talking with a group of German investors who wished to start developing a toll road project linking a German center in West Jakarta, and to invest in coal mining in Ombilin, South Sumatra.

"The economic train is now moving and will soon move fast. If you continue to be pessimistic you'll be left behind," he said. (rei)