Two PT PLN subsidiaries to go public
Two PT PLN subsidiaries to go public
JAKARTA (JP): Subsidiaries of the state-owned electricity
company PT PLN are to float their shares internationally in the
near future, President Soeharto said yesterday.
Speaking at the opening of a three-day working conference of
the Ministry of Mines and Energy at the State Palace here, the
President cautioned that the international flotation should be
prepared carefully.
"The success of PT Tambang Timah (the state-owned tin mining
firm) should be taken as a valuable lesson in the international
floating of shares of other state companies," he said.
Tambang Timah listed some of its shares on the London, Jakarta
and Surabaya stock exchanges last October.
Last year PLN set up two subsidiaries -- PT PLN Pembangkit
Jawa Bali I and PT PLN Pembangkit Jawa Bali II -- as preparation
for its privatization.
The two subsidiaries are assigned to manage electricity power
plants and distribution on Java and Bali.
PLN, which had total assets of Rp 24 trillion (US$10.3
billion) at the end of last year, expects to make a net profit of
Rp 1 trillion this year.
President Soeharto considered the international flotation of
state-owned mining and energy companies as part of the
government's efforts to promote the role of the private sector in
these sectors.
He noted that current development in the mining and energy
sector, particularly in the upstream industry, is still dominated
by state-owned enterprises.
"Due to financial constraints, the government cannot increase
its investment in these sectors and, therefore, is encouraging
the private sector to take part in its development."
Soeharto cited as an example the need to find new oil
reserves. "If we don't find any new oil reserves, we'll become a
net oil importer between the year 2005 and 2010," he said.
The President also asked the Ministry of Mines and Energy to
improve its efficiency. "Every project that requires a big
investment should be very carefully assessed," he said.
He called for a greater use of locally-made products in mining
and energy activities.
At yesterday's inaugural ceremony, Minister of Mines and
Energy I.B. Sudjana mentioned the need to streamline the
bureaucracy and to modernize state-owned enterprises.
"This is necessary to sharpen the competitive edge of our
mining and energy products," he said.
He noted that one way to do it is to allow state-owned firms
to go public. Another way is by promoting what he called "cross
fertilization", cooperation, between subsidiaries of state-owned
companies or between them and other modern companies with better
management.
The ministry currently oversees seven state-owned companies:
Pertamina, Tambang Timah, PT Tambang Batubara Bukit Asam, PT
Aneka Tambang, PLN, PT Gas Negara and PT Koneba. There are 178
state-owned companies in Indonesia.
Minister of Finance Mar'ie Muhammad told the meeting that 86
companies have been assessed as less than healthy and not
entirely sound.
"This shows that they are not efficient and we are very
concerned about their condition," Mar'ie said, in a written
speech read out by Secretary-general of the Ministry of Finance
Dono Iskandar.
Mar'ie stressed that if the government continues to tolerate
such inefficiency, it may affect the national economy as the
state companies operate in almost all its sectors.
He said that state-owned companies, with total assets of Rp
300 trillion, should become the vanguard and backbone of the
efforts to improve overall economic efficiency.
The inefficiency he blamed on two factors, namely poor
management and too much government interference and said that
privatization is the way to remedy the situation.
"We're currently finalizing a reform package for the state-
owned enterprises," he said, adding that it will be announced in
the near future. (13)
Challenges -- Page 8