Dahlan: PGN-Pertagas merger cancelled

State Minister of State-Owned Enterprises Dahlan Iskan said that the plan to merge PT Pertagas, the gas distribution subsidiary of state-owned oil and gas firm PT Pertamina, into state-controlled gas distribution firm PT PGN Tbk has been cancelled.

Dahlan was quoted as saying by Kontan Wednesday that the two companies now have better synergy in developing gas distribution facilities in the country.

The comments were made after a May 7 letter from Dahlan was leaked to the press, instructing Pertamina to let Pertagas to be acquired by the IDX-listed PGN.

But Dahlan was quoted as saying there is now no more urgency to the letter, while other reports quoted him as saying that the letter never existed.

He acknowledged that he deliberately started the discourse of the PGN-Pertagas merger as the two companies have long been in conflict over gas distribution business in the country, causing the state to suffer as development of badly needed gas pipeline facilities had been hampered.

Dahlan claimed that following the merger threat, the two firms are now ?behaving? properly, willing to work together such as in the development of the Cirebon-Semarang gas pipeline project.

Meanwhile, Ugan Gandar, chief of the Pertamina workers union accussed Dahlan of deliberately making the statement for PGN to acquire Pertagas in a bid to help shore up the sagging price of the PGN shares in the stock market, an accussation dismissed by Dahlan as baseless.

Managing Partner of Investa Saran Mandiri, Kiswoyo Adhie, was quoted by Kontan as saying that Dahlan may have been instructed by President Susilo Bambang Yuhoyono to refrain from making policies with long-term implication at the end of the tenure of the current administration. (*)