27 Mei 2008
Lawmakers question privatization of Krakatau Steel

The governments proposed plan to privatize Krakatau Steel, the countrys largest steel producer, continues to stir heated debate at the House of Representatives, with many lawmakers opposing the plan.

Members of several major House factions, including the Indonesian Democratic Party of Struggle (PDI-P), the Prosperous Justice Party (PKS), the Democratic Party and the National Mandate Party (PAN), have asked the government to reconsider selling its stake in Krakatau Steel.

"I was informed many banks were willing to lend money to Krakatau Steel, so the government should discontinue its plan to sell the company," Andi Salahudin of the PKS said Monday.

He was speaking at a hearing of House Commission VI, which oversees state enterprises.

Refrizal, another representative, said the government should not sell Krakatau Steel to foreign companies simply to procure more money.

"Were against this, as well as the governments plan to privatize Krakatau Steel. It would be better to turn to bank loans. Many banks have expressed interest in financing Krakatau Steel," Refrizal said.

Neither lawmaker named specific banks.

The government has said it plans to privatize the company, either through a strategic sale or IPO, as a way of improving the companys performance.

To date, four overseas companies have shown an interest in acquiring Krakatau Steel ArcelorMittal and Tata Steel, both from India, BlueScope Steel from Australia and South Koreas Posco.

Soekarjo Hardjosoewirjo of the PDI-P questioned the urgency of privatizing Krakatau Steel, saying it is astrategic national asset.

"Is it that urgent to sell Krakatau Steel? If the government really needs money for expansion then for what specific purposes? Isnt there any other option to raise money besides privatization?" Soekarjo said.

In response, State Minister for State Enterprises Sofyan Djalil said the government had no intention of selling a national asset just for the money.

"Please dont look at it that way. The government has no intention of benefiting through this privatization program," he said.

He said Krakatau Steel needed funds to expand its business and boost its production capacity in the wake of rising demand for steel. Domestic demand is expected to increase to between 8 and 10 million tons per year by 2012.

"Krakatau Steels current annual production is only 2.5 million tons. Through privatization, we expect to be able to increase production significantly," Sofyan said.

Current domestic demand for steel stands at 6 million tons, of which 2 million are imported, (dia)

Sumber :  The Jakarta Post, Page : 13 

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