Budget for German ships slashed<\/p>\n
JAKARTA (JP): State Minister for Research and Technology B.J.
\nHabibie has agreed to slash the US$1.1 billion he proposed to buy
\n39 German second hand warships to $482 million.<\/p>\n
Minister of Finance Mar'ie Muhammad countered that the
\ngovernment can provide only $319 million, and proposed that costs
\ncan be slashed to meet this figure.<\/p>\n
Habibie and Mar'ie presented their stands in separate hearings
\nwith the House of Representatives (DPR) yesterday.<\/p>\n
Habibie, who was entrusted by President Soeharto to handle the
\npurchase of used ships, guaranteed that with the $482 million,
\nthe vessels "can be transferred to the Navy soon."<\/p>\n
The $482 million that Habibie proposed would include re-
\npowering the main engines of 16 corvettes in addition to
\nrefurbishment, staff training, shipping, preparatory work at PT
\nPAL dock yard and administration.<\/p>\n
In the hearing with House Commission X on research and
\ntechnology, Habibie said he would keep seeking a $482 million
\nbudget.<\/p>\n
The government is trying to dispel the controversy over the
\nprocurement of the vessels which critics say cost far too much
\nfor Cold War relics.<\/p>\n
The original $1.1 billion proposal included the cost of the
\nships, refurbishment and a range of new facilities to support the
\noperation of the vessels, which cost between $10 million and
\n$12.7 million each.<\/p>\n
Refurbishment and training which was originally estimated to
\ncost $263.5 million is to be cut to $238 million and the $64
\nmillion for preparatory work at the state-run dock yard PT PAL
\nslashed to $9.5 million.<\/p>\n
Re-powering of the Parchim corvettes which was to cost $63.7
\nmillion is to be scrapped. So is the plan to buy two tankers
\nworth $40 million and development of a $151 million Navy base in
\nTeluk Ratai.<\/p>\n
Indonesia is purchasing 16 Parchim corvettes, 9 Kondor mine
\nsweepers and 14 Frosch tank landers from the former arsenals of
\nEast Germany. So far, it has taken delivery on 17 of them.<\/p>\n
Mar'ie said in a hearing with House Commission VII on finance
\nthe decision to lower the budget to $319 million was taken in a
\nmeeting between related ministers, including himself and Habibie.<\/p>\n
He said the government meant to implement the project in
\nphases because of financial constraints.<\/p>\n
To protect Indonesia's foreign exchange reserves, $223 million
\nof the funds would be obtained from Kreditanstalt Fur
\nWiederaufbouw in semi-soft loans. Bank Indonesia will pay the
\nremaining $96 million, he said.<\/p>\n
Defensive<\/p>\n
The procurement of the ships has put Habibie, who also chairs
\nthe Agency for Assessment and Application of Technology (BPPT)
\nand The Agency for Development of Strategic Industries (BPIS), on
\nthe defensive.<\/p>\n
He dismissed charges yesterday that the vessels are too old
\nand hardly seaworthy.<\/p>\n
Habibie maintains that the ships are still new and will be
\ncombat ready after being refurbished. He said the oldest one had
\nbeen in service for only seven years before being mothballed when
\nthe two Germanies united.<\/p>\n
Habibie also denied a legislator's allegation that the Armed
\nForces (ABRI) was not adequately involved in the process, right
\nfrom the early negotiations to the transfer. "BPPT was involved
\nin the early talks and the final decision was taken by the ABRI
\nchief," he said. "The Navy was more involved than BPPT."<\/p>\n
Amidst the controversy over the budget, one of the tank
\nlanders nearly capsized off the Biscay Bay in Spain last Friday
\nas it was being delivered from Germany to Indonesia. The ship,
\nthe Teluk Lampung, has been towed to a safe spot and will undergo
\nrepair before resuming its journey, officials said. (pan\/fhp)<\/p>",
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