Garuda told to be fully transparent<\/p>\n
JAKARTA (JP): Minister of Transportation Haryanto Dhanutirto
\nasked the national flagcarrier Garuda Indonesia yesterday to
\nsolve its liquidity problems and to be fully transparent to the
\ngovernment.<\/p>\n
\"State companies like Garuda have to be fully transparent to
\nthe government so that we know what is really going on,\"
\nDhanutirto said after installing Supandi as the new president of
\nthe 46-year old airline company.<\/p>\n
Supandi, former Garuda's director for personnel and general
\naffairs, replaced Wage Mulyono who held that position for just
\nabout three years.<\/p>\n
The minister rejected speculations that Wage's retirement was
\nrelated to what the mass media saw as too much intervention by
\nhis ministry in the Garuda management.<\/p>\n
The government is involved only in the macro-policy of state
\ncompanies. But the government does not want to be called in as a
\nfire extinguisher when a state company is mired in severe
\ndifficulties, he said.<\/p>\n
\"Wage's retirement was due a long time ago but his replacement
\ncould not take place until today,\" the minister told newsmen
\nafter the installation.<\/p>\n
Rumors about the impending replacement of Wage had surfaced
\nonly 18 months after his appointment, amid extensive mass media
\nreports about Garuda's financial problems due to heavy debt
\nservice burdens. In addition, differences surfaced between the
\nviews of the management and the ministry of transportation in the
\nareas of new jet procurement, the sales of old jets and flight
\nroute distribution.<\/p>\n
\"I don't know anything about jet procurement or sales and
\ntheir prices,\" Dhanutirto said in reply to reporters' questions.<\/p>\n
Procurement<\/p>\n
He said he learned of Garuda's plans to sell its old jets and
\nof the changes in its new jet procurement plans only from
\nreports.<\/p>\n
Supandi, who returned to Garuda in late 1993 after serving
\nfour years as the chairman of the Batam Development Authority,
\nhad earlier served at the airline in 1987-1989.<\/p>\n
Both Supandi and Wage are retired air commodores and former
\nadjutants to President Soeharto.<\/p>\n
Supandi told newsmen after his installation yesterday that the
\ngovernment had set up a special task force of officials from the
\nministries of transportation and finance and Garuda itself to
\nwork out ways of strengthening Garuda's financial structure.<\/p>\n
\"The special team will also study Garuda's planned
\nprivatization through a direct placement,\" Supandi added.<\/p>\n
The Indonesian air carrier last month agreed to set up a
\nstrategic alliance with KLM whereby the Dutch airline will buy a
\nportion of Garuda's shares.<\/p>\n
Even though Garuda more than tripled its before-tax profits to
\nan estimated Rp 350.6 billion last year, the company is
\nreportedly facing some liquidity problems due to heavy debt
\nburdens.<\/p>\n
The airline also badly needs additional funds to modernize
\nits aging fleet.<\/p>\n
Fleet plans<\/p>\n
Supandi added that Garuda periodically reviews its fleet plan
\nin line with its financial condition.<\/p>\n
\"For instance, we have canceled our plan to buy new jets and
\nwill instead lease the planes,\" he said.<\/p>\n
He said in 1989 Garuda planned to buy nine Boeing B747-400s,
\nbut then changed the plan in 1993. Garuda finally bought only two
\nB747-400s, which are currently in operation, and will lease
\nanother one next month.<\/p>\n
The 11 MD-11s and 10 A300-600s currently operated by Garuda
\nhave also been procured on a lease basis, Supandi added.<\/p>\n
\"We have canceled the procurement of nine A330 aircraft and
\ninstead will lease only six A330s,\" he said, adding that the
\nlease agreement was still under negotiation with the Airbus
\ncompany.<\/p>\n
He said Garuda last month sold 17 DC-9 aircrafts to an
\nAustralian company on a cash-payment basis.<\/p>\n
But Garuda is still seeking buyers for its 13 Fokker F-28s and
\nnine A-300-B4 aircraft through competitive bidding, he said.
\n(icn)<\/p>",
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