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In an apparent policy reversal, the new state enterprises minister announced on Thursday that he might drop plans to publicly list several important state companies if “other alternatives” could be found to improve performance. The about-face comes amid criticism of the share offerings from lawmakers.

“Privatization or going public is only an alternative and it’s really conditional,” said Minister Mustafa Abubakar after a meeting on Thursday with members of the House of Representatives’ Commission XI overseeing finance.

For some SOEs, it would be enough to group them under holding companies or have them form strategic alliances, he said.

“We will look at several formulas and find a proper option that will suit these SOEs depending on their characteristics,” he said, declining to elaborate on the options.

Any cancellation would put the government’s long-touted SOE plan in doubt. Under previous Minister Sofyan Djalil, partial privatization of SOEs was a top priority to increase transparency and efficiency in the companies, many of which have faced accusations of being poorly managed and graft-ridden.

Sofyan also hoped that by listing the SOEs on the local bourse it would force them to institute proper accounting standards and increase their access to sources of capital.

Mustafa said some of the companies for which IPO plans may be dropped, included three state-owned plantation companies, PT Perkebunan Nusantara (PTPN) III, IV and VII.

Analysts have said these companies are in dire need of funds to modernize their operations and are finding it difficult to compete with rivals in the private sector.

“If we can find other ways to increase the PTPNs’ performance we will take them, and we won’t have to go through with the ‘go-public’ plan,” Mustafa said.

Other high-profile IPO plans that could also be halted, despite already being approved by the House, are national flag carrier PT Garuda Indonesia and PT Krakatau Steel.

Garuda plans to raise $400 million of fresh capital in the middle of next year by selling as much as 40 percent of the government’s shares in an IPO, while Krakatau is aiming for a Rp 3.5 trillion ($371 million) windfall from selling 30 percent of its shares in the second half of 2008. Mustafa declined to comment on the fate of these two companies when asked by reporters.

He did promise, however, that the IPO plans for state owned mortgage lender PT Bank Tabungan Negara (BTN) and construction company PT Pembangunan Perumahan (PP) would not be interrupted as preparations “were in the final stages”.

BTN hopes to amass around Rp 2.6 trillion from the country’s biggest initial public offering of 2009, with plans to list on Dec. 17 by selling a 27 percent government stake. PP is aiming for around Rp 1.5 trillion by selling as much as 30 percent of government shares, with an IPO set for the first quarter of 2010.