PTBA agrees to meet workers? demand to get higher pay

State owned coal mine producer PT Bukit Asam (PTBA), which is scheduled to launch its initial public offering (IPO) later this year, has agreed to meet the demand from its low-grade workers to increase their welfare allowance, Palembang Post reported on Monday.

The company?s president director Ismet Harmaini said over the weekend that the coal mining company which operates massive coal concession areas in Tanjung Enim, South Sumatra agreed to meet 85 percent of the increase in the welfare allowance demanded by the workers of grade four, five and six.

"We are only able to meet 85 percent of their demand. We hope the workers understand with the unfavorable condition of the company," he said,

PTBA is one of several state firms which will be privatized to raise funds to finance the government?s budget deficit. The company has received a green light from the government and legislators to launch the IPO between October and November this year. The company will sell about 30 percent of its shares during the IPO.

The planned IPO has, however, received a strong resentment from the local residents and workers who feared that the privatization would reduce the company?s community development program. But Ismet said that he was optimistic that the local people would at the end support that the IPO. "The privatization would force the management to improve the company?s performance. This will consequently enable the company to give a better contribution to the local people. (*)