Wednesday, October 19, 2005

Privatization rebuff

The state-owned enterprises ministry is pouring cold water into privatization issue and prefers to have SOEs doubling their dividend to the state next year.

Mohammad Said Didu, secretary to the ministry said next year’s dividend target is Rp23.5 trillion, more than 100% of this year’s target at Rp11 trillion.

Didu went further saying there is no need for privatization this year as the state budget is not under heavy pressure anymore and dividend could substitute the income target from privatization. “I don’t see which SOE to be privatized,” he said.

Previous administration set the privatization target for this fiscal year at Rp3.5 trillion. But this administration is just about to start privatization through the selling of 9% shares of state-owned gas distribution company PT Perusahaan Gas Negara (PGN) Tbk. SOE Ministry is in the process to select placement agent for those shares.

Both minister of finance Yusuf Anwar and coordinating minister for economic affairs Aburizal Bakrie had reminded SOE minister Sugiharto to fulfill his ministry’s privatization target. But Sugiharto is unenthusiastic about privatization saying he prefers to raise dividend payment from SOEs.

Anwar disagree with Sugiharto saying dividend payment and privatization income are two different issues. “Dividend amount payable is very much depends on profitability of a SOE. Privatization is a result of divesting stakes, in all or parts,” he said.

Early last month, President Susilo Bambang Yudhoyono issued a new regulation (PP No.33/2005) on privatization. One of its articles (article 9) deliberated that SOE in the fields of natural resources can’t be privatized. But government failed to come up with clear definition of natural resources-based SOE. Some interpret this for companies like PGN, Pertamina (oil and gas), PT Aneka Tambang Tbk (mining), PT Tambang Batubara Bukit Asam Tbk (mining) and all plantation SOEs.

In contrast to the privatization of SOE issue, SBY’s administration is open to private participation in public service sectors including electricity, water supply, telecommunication, toll roads, ports, and others.

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October 19, 2005 5:55 AM  

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