Jakarta – The House of Representatives (DPR) has rejected a government's plan to merge state-owned Bank Tabungan Negara (BTN) with a publicly-listed state bank.

If approved, the planned merger would make it difficult for middle- and low-class people to obtain loans to buy low-cost houses, Enggartiasto of the House Commission V for transportation, telecommunications, public housing, and public works, said at a hearing with real estate developers here on Monday.

He said BTN had played a major role in helping the government provide loans for the public to buy low-cost houses. "If merged with a commercial bank, BTN will lose its function," he said.

What was more, the housing development program was high on the list of the government's priorities, he said.

Economically, the program was not profitable, but politically it would benefit the government, he said. "If approved, the planned merger will threaten the program," he said.

Meanwhile, Muqowam, another member of the House Commission V, said the government should not see BTN merely from the aspect of profit and loss.

Separately, on Monday, State Minister for Public Housing M Yusuf Ansyari said the government needed three to four banks engaged in the housing sector particularly to support BTN which plans to provide loans for the construction of 75,000 low-cost bouses this year.

"To achieve the target of the building of 225,000 low-cost houses in 2005, we need another bank like BTN," he said.

This meant that if the government pushed through with its plan to merge BTN with another bank, the people who wished to have their own houses should forget the wish. "This is because the only bank which provides home loans no longer exists," he said.

After all, Ansyari said the House Commission V would continue to discuss the planned merger with the state minister for state enterprises and other relevant parties. "The problem is related not only to the economic aspect but also the socio-political aspect," he said.

Sharing Ansyari's views, former public housing minister Siswono Yudhohusodo said he rejected the planned merger. "I do not agree with the plan to merge BTN with other publicly-listed state banks," he said.

He said BTN had performed well over the past few years. Even at the height of the economic crisis in 1997, BTN was still able to provide loans to low-income people to buy a house of their own.