The government will wait for the Jakarta main index to break 2,000 points before going ahead with plans to privatize state owned enterprises (SOEs) through initial public offerings (IPOs) on the capital market.

"We are expecting the index to go higher than 2,000, so we can go public again. We also still need further discussions with the privatization committee to decide the prices of the shares" State Minister of State Enterprises Sofyan Djalil said on Friday.

He acknowledged that the increase of the stock index during the week after the April 9 legislative election was quite significant.

The Jakarta Composite Index steadily increased from 1,465 on April 8 to 1,591.34 points Friday, despite a declining trend in the past several days.

Last December, the office announced a plan to sell shares in up to 30 state enterprises this year, most of them through IPO schemes.

The companies waiting for going public include the country's biggest steelmaker PT Kratakau Steel, national airline flag carrier PT Garuda Indonesia, PT Waskita Karya, and state-run lender Bank Tabungan Negara (BTN).

In 2008, the House of Representatives approved those companies to be privatized in order to generate about Rp 10 trillion (US$1.06 billion) in proceeds.

The legislators for example asked the government to sell a 30 percent stake in Krakatau Steel worth Rp 3.22 trillion.

Krakatau is expecting its revenue to go from Rp 24.6 trillion last year to Rp 33.6 trillion by 2012, and its profits to grow from Rp 1.5 trillion to Rp 3.1 trillion in the same period.

The company has reported that Indonesia needs about 6 million to 7 million tons of steel products annually, while it currently only produces 4 million tons.

The House also recommended the sale of 30 percent of BTN in early 2009.

If this IPO could generate fresh capital of between Rp 1.5 trillion and Rp 2 trillion, the bank's revenue would be expected to increase from Rp 22.9 trillion this year to Rp 36.3 trillion by 2012, and its profit to grow from Rp 472 billion to Rp 1.4 trillion.

Meanwhile, Garuda plans to sell 30 percent of its shares worth Rp 4.2 trillion in 2009. Out of these funds, Rp 2.5 trillion will be used to pay its $836.1 million in debts while Rp 1.7 trillion would be used to expand its fleet of aircraft.

The privatization program aims not only to generate revenue for the state coffers to help the government cover the annual state budget deficit, but also to increase the exposure of state owned enterprises to higher degrees of efficiency, transparency and accountability - eventually to help them compete better with their private rivals.

Indonesia is home to more than a hundred state companies, with quite a few of them still suffering from losses.

Still, in total, the ministry reported that state firms booked about Rp 75 trillion in 2008 in unaudited profits, although slightly lower than the initially planned Rp 81 trillion.

The estimated aggregated 2008 net profits were only a 4.7 percent increase on those of 2007.

However from 2006 to 2007, state enterprises recorded a 32 percent growth in net profits. (naf)

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