Government decision due on underwriting Garuda<\/p>\n
Tantri Yuliandini, The Jakarta Post, Jakarta<\/p>\n
The government will need one or two days to decide whether or
\nnot to agree on a guarantee scheme to underwrite war and
\nterrorism insurance coverage for national flag carrier Garuda
\nIndonesia, a senior official of the Ministry of Finance has said.<\/p>\n
Director general of financial institutions Darmin Nasution
\nsaid on Monday that the government had first to verify the
\ninformation on how urgent the airline needed the guarantee, and
\nwhether the guarantee was unavoidable.<\/p>\n
\"We need to know whether there are other options or whether
\nthere are new developments in the market; I can't tell you what
\n(the government) will decide right now,\" he told reporters
\noutside a hearing with the House of Representatives committee on
\nthe state budget.<\/p>\n
Darmin admitted that the new insurance coverage would not be
\nadequate to cover all the damage if an accident happened due to
\nwar or terrorism, and that without the government's guarantee the
\nstate-owned airline might be banned from flying.<\/p>\n
Airlines around the world have been turning to their
\nrespective governments for help after insurance companies decided
\nto cap third-party war and terrorism insurance coverage at US$50
\nmillion from the previous $2 billion maximum.<\/p>\n
Aviation analysts said the minimum coverage to be provided by
\nthe government should be around $750 million.<\/p>\n
Garuda sent a letter to the Ministry of Finance last week
\nrequesting a guarantee.<\/p>\n
Without adequate insurance coverage, the airline faces the
\nprospect of being grounded, as the U.S. and some other countries
\nplan to restrict the flights of airliners that do not have
\nsufficient insurance coverage.<\/p>\n
\"We realize that in guaranteeing the coverage we don't need to
\nimmediately set aside the funds ... but simply need to say how
\nmuch we would be willing to pay if anything were to happen\" he
\nsaid.<\/p>\n
However, he could not determine how much the government was
\nwilling to guarantee to Garuda, saying that it would need further
\ndiscussion to decide.<\/p>",
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"sponsor_url": "https:\/\/okusiassociates.com"
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