Management of 10 to-be-privatized state firms need to be replaced

A deputy chairman for restructuring and privatization at the state minister of investment and state enterprises development, Agus Muhammad, suggested that the management at 10 state firms that will be privatized be replaced with new ones to help his office meet the target to collect Rp 6.5 trillion this year to help finance the 2000 state budget.

Agus said the management of those 10 state firms did not have the commitment to help the government reach its privatization target.

The 10 state firms are coal miner PT Tambang Batu Bara Bukit Asam, plantation firms PT Perkebunan Nusantara (PTPN) III and IV, pharmaceutical firms PT Indo Farma and PT Kimia Farma, fertilizer firm PT Pupuk Kaltim, mining firm PT Aneka Tambang Tbk, airport operator PT Angkasa Pura II, surveyor company PT Sucofindo, and paper producer PT Kerta Niaga.

Agus said that other constraints preventing the sales of the state firms include political hurdles, namely oppositions to sell state firms, and the undervalued book value of the state firms.

Meanwhile, economist Tony Prasetiantono from Gadjah Mada University said that the government, especially the finance ministry, should anticipate the lower than targeted income from the privatization of state firms and sales of assets under the Indonesian Bank Restructuring Agency (IBRA).

IBRA has only collected Rp 7.5 trillion, out of the targeted Rp 18.9 trillion this year.

With better anticipation, the government, Tony said, could now take out some non-core development projects from the budget, and thus their impacts to the economy and the people would be minimal. (*)