News Room - Steel Industry

Posted on 25 Jan 2008

Indonesia plans to privatise 37 state-firms in 2008

Indonesia is considering selling stakes in 37 state firms in 2008 to help plug the budget deficit as it seeks to improve the firms' performance, the state enterprises minister said late on Monday.

The firms include lender PT Bank Tabungan Negara, PT Jakarta Lloyd, steel maker PT Krakatau Steel, surveyor firm PT Sucofindo, property firm PT Pembangunan Perumahan, aerospace company PT Dirgantara Industri, and plantation firms Perkebunan Nusantara III, IV and VII.

Indonesia's privatisation programme has stalled in the past because of strong opposition from many politicians who regard privatisation as selling off the family silver.

The government expects to sell more shares in state firms to the public through initial public offerings this year as part of efforts to strengthen corporate governance as well as raise fund for the state budget.

"If the state firms can become private or have good strategic investors, they will be more transparent and efficient," State Enterprises Minister Sofyan Djalil told reporters on the sidelines of a parliamentary hearing.

"It is crucial to boost the firms' performance by increasing their capital by selling some (government) stakes or inviting strategic investors."

The government expects its privatisation programme to contribute 1.5 trillion rupiah ($158.6 million) to its 2008 state budget.