TAIWAN TO OPT FOR AUCTIONS OVER OFFERINGS IN PRIVATIZATION

TAIWAN TO OPT FOR AUCTIONS OVER OFFERINGS IN PRIVATIZATION

Taiwan will attempt to revive its flagging privatization program by

auctioning off stakes in state firms instead of making public offers of stock at fixed prices, but analysts doubt the new method will prove more successful.

Premier Lien Chan directed ministries last week to choose one or two small state-owned enterprises as test cases for the auction method.The Council for Economic Planning and Development, Taiwan's economic planning agency, set a new timetable for the transfer of 26 state firms worth billions of U.S. dollars into majority private ownership over the next eight years.

Under the council's plan, BES Engineering Corp. would be transferred into majority private ownership by the end of this year, Taiwan Machinery Manufacturing Corp. by January 1994 and China Petrochemical Development Corp. by June 1994.

The government's stake in Yang Ming Marine Transport Corp. would be reduced to 50.94 percent from 88.68 percent by June 1994, and 18 small firms owned by the state's military pension fund would be privatized by June 1996.

Majority private ownership of giant companies would come later - China Steel Corp. and Taiwan Fertilizer Co. by June 1995, Taiwan Shipbuilding Corp. by June 1997 and Chinese Petroleum Corp. by June 2000.

Taiwan began its privatization program in 1989, but progress has been glacial because of bureaucratic inefficiency, opposition from unions and stock market weakness.

Analysts said the new method could take some pressure off the market, but they remained skeptical.

Dickson Ho, vice president of W.I. Carr, said investors would be interested in companies with good profits and performance, but not in poorly performing firms.