'IPTN's loans converted to equity'<\/p>\n
JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
\nconfirmed yesterday that loans to state aerospace company PT IPTN
\nfrom interest on reforestation funds had been converted into
\ngovernment equity in that company.<\/p>\n
Djamaludin said the decision to convert the funds had been
\nmade by virtue of a presidential decree last year.<\/p>\n
\"By converting the loans into government equity shares, we
\nhave helped improve IPTN's financial structure,\" Djamaludin told
\na hearing of House Commission IV on agriculture, transmigration
\nand forestry.<\/p>\n
He said that, after the decree, the finance minister had
\ntransferred the funds to the state treasury which transferred
\nthem to IPTN.<\/p>\n
\"This was the President's decision,\" he said when asked about
\nthe reason for the conversion.<\/p>\n
But the Strategic Industry Management Board, which oversees
\nIPTN, said last week the aerospace company had not received
\nadditional equity from the government since 1995.<\/p>\n
Giri Suseno, an executive on the board, told another hearing
\nthat IPTN had received Rp 1.32 trillion in government equity by
\n1994.<\/p>\n
Giri said that neither IPTN or the nine other companies under
\nthe board would ask for additional government equity in the next
\nfiscal year.<\/p>\n
In 1994, the forestry ministry transferred IPTN more than Rp
\n400 billion (US$174 million at current rates) in interest gained
\nfrom reforestation funds. IPTN is based in Bandung and is chaired
\nby State Minister of Research and Technology B.J. Habibie.<\/p>\n
An earlier presidential decree had allowed the interest to be
\ntransferred as an interest-free loan to IPTN to develop its N-250
\naircraft.<\/p>\n
Reforestation funds, now in time deposits at state banks, are
\nmanaged by the forestry ministry but are not accounted for in
\nstate budgets. Their utilization therefore escapes legislative
\nsupervision.<\/p>\n
The funds, collected from mandatory levies on forest
\nconcessions, aim to guarantee that forests are managed in an
\nenvironmentally sustainable manner.<\/p>\n
Many observers and environmental organizations were surprised
\nwhen the government ordered that some interest from the funds
\nwould go to IPTN.<\/p>\n
Eleven environmental groups filed a lawsuit against President
\nSoeharto at the State Administrative Court. The presiding judge
\nthrew the case out of court.<\/p>\n
Djamaludin said that more than Rp 6 trillion in reforestation
\nfunds had accumulated since their introduction in the early
\n1980s.<\/p>\n
In the first nine months of the 1996\/1997 fiscal year, the
\ngovernment reaped Rp 523.7 billion in reforestation funds and Rp
\n174.5 billion in interest and fees.<\/p>\n
\"The use of reforestation funds and its interest for non-
\nforestry purposes, such as IPTN, was the first case and will
\nhopefully be the last,\" he told yesterday's hearing.<\/p>\n
According to Presidential Decree No. 29\/1990, reforestation
\nfunds must be used to develop forests and rehabilitate land.
\n(pwn)<\/p>",
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