Minister says 28 SOEs to be privatized in 2008

The Jakarta Post, Jakarta

The government plans to privatize 28 state-owned enterprises (SOE) next year to help cover the 2008 budget deficit.

State Minister for SOEs Sofyan Djalil said the privatization plans -- which are expected to raise Rp 1.5 trillion (US$160 million) -- would be proposed to the House of Representatives for approval by as early as January.

Among the SOEs to be privatized -- through initial public offerings and strategic sales to investors -- will be state insurance company PT Jasindo and a number of plantation firms.

"The plans for the privatization of the plantation firms just needs final confirmation from the agriculture minister (Anton Apriyantono)," Sofyan was quoted as saying by Antara after a meeting late Monday with Coordinating Minister for the Economy Boediono.

The meeting was held to seek agreement from other relevant ministers.

"I don't think there will be any problems as it's just pushing ahead with what we've already planned."

Sofyan further said that apart from the privatization plans, a number of SOEs would also be restructured, including shipping firms PT Djakarta Lloyd and PT Bahtera Adiguna, and marine services firm PT Rukindo.

"We will just restructure the companies, not privatize them. (Investment house) Bahana, for example, will be taken over by another state firm," he said without elaborating.

Meanwhile, the secretary of the State Ministry for SOEs, Said Didu, said that next year's budget required the state ministry to raise Rp 1.5 trillion in net proceeds from privatizations -- less than the Rp 2 trillion target set for this year.

The government sold some of its shares in state lender PT Bank Negara Indonesia (BNI) and construction firm PT Adhi Karya as part of this year's privatization program.

Said said that the government would also focus on increasing dividend payments from SOEs, especially having regard to the some Rp 9 trillion in windfall profits that state oil and gas firm PT Pertamina would likely gain from the recent surge in global oil prices.

"But that's still being discussed -- whether it will be paid out as a dividend to the state or not. The windfall profit issue only arises in a worst-case scenario," he said, referring to the recently unveiled action plan prepared by the government should oil prices average $100 a barrel throughout next year.