Urip Hudiono, Jakarta – The government is in a hurry to sell its remaining shares in several publicly listed banks this year to help plug the state budget deficit amid a shortfall in revenue from the privatization program.

"We will sell more of our minority stakes in the banks in an effort to cover the deficit," Minister of Finance Yusuf Anwar said on Friday.

"We will try to accomplish this by the end of the year – within the remaining 60 days we have left." The government has set itself a deficit target of Rp 26.6 trillion (US$2.9 billion), or 1.3 percent of gross domestic product, for this year. This deficit is supposed to be financed by proceeds from the privatization of state enterprises, the sale of government assets (primarily shares in a number of publicly listed banks) under the PPA, the Ministry of Finance's asset management company, and foreign loans.

But State Minister for State Enterprises Sugiharto said on Friday that the government would not be able to meet the Rp 5 trillion (US$550 million) privatization proceeds target. So far it had only managed to raise Rp 3.4 trillion from the privatization program. With only a couple of months before the current fiscal year ends, it would be impossible for the government to continue the privatization program particularly with the ongoing internal conflict in the House of Representatives. The government would need to obtain the House's approval for the sale of stakes in state enterprises.

"The government does not have enough time to formulate new privatization plans, and so will have to push ahead with those that have been approved by the House of Representatives for this year," he said, referring to the planned sale of stakes in state-controlled Bank Mandiri and Bank Negara Indonesia (BNI).

The government on Thursday managed to raise Rp 1.74 trillion from the sale of a 10 percent stake in publicly listed Bank Danamon.

PPA president director Mohammad Syahrial said on Friday that his office was ready to sell another 20 percent of government shares in Bank Permata in the middle of December. "It [the selling price] is, however, still being calculated by the finance ministry," he said.

The Standard Chartered and PT Astra International consortium recently won a bid to buy the government's 51 percent stake in Permata, which was valued at Rp 2.77 trillion.

The government currently holds 5 percent of the shares in Bank Central Asia (BCA), 20.8 percent in Bank Internasional Indonesia (BII), and 21.5 percent in Bank Niaga. The government obtained stakes in these private banks after bailing them out in the wake of the late 1990s financial crisis.

The government expects to be able to earn a total of Rp 12.9 trillion in cash from the sale of assets vested in the PPA this year. This figure is more than double the initial target of Rp 5 trillion.

While some analysts said that the plan to sell more of the government's shares in publicly listed banks was timely considering the current rally in the stock market, others said that the pressure to carry out the sales quickly could result in investors making lower than expected offers.