The government may sell part of its stakes in up to 20 state-owned enterprises (SOEs) in the second half of the year, mostly through initial public offerings, as part of its privatization drive.

The sell-off plan, however, will exclude the sale of the government's stake in Bank Negara Indonesia (BNI), the nation's third largest lender, State Minister for State Enterprises Sugiharto said Wednesday.

Sugiharto fell short of naming the companies, saying it would depend on "the timing, pricing and sizing", but did say that he preferred the sales to be conducted through IPOs rather than strategic investors.

"An IPO involves market mechanisms, which are more transparent and accountable," Sugiharto said at the State Palace.

Under the 2006 state budget, the government has committed itself to raising Rp 1 trillion (around US$105.2 billion) this year from the sale of part of its stakes in state companies. The proceeds will then be used to help plug this year's budget deficit, which is projected at Rp 22.4 trillion.

"The target should not be too hard to achieve as there are plenty of SOEs ready to go public," he said, despite concerns over the government's ability to meet the target in the light of its failure to meet last year's target.

From an original target of Rp 3.5 trillion last year, the government in the end failed to sell any SOE shares.

Commenting on BNI, which has been making headlines in connection with its plans to sell off more of its shares, Sugiharto pointed to the bank's relatively high level of non-performing loans (NPLs) as the main reason why the planned sale had to be put on hold.

"In the case of BNI, whose NPL rate stood at about 12 percent in 2005, it will need to undergo restructuring first before going ahead (with the share sale)," he said, adding that BNI shares would fetch a low price should the bank decide to sell them now.