Timor car project won't be rescheduled<\/p>\n
JAKARTA (JP): PT Timor Putra Nasional said yesterday it would
\nnot reschedule or postpone its US$1 billion car manufacturing
\nproject in West Java despite President Soeharto's call for
\nspending retrenchment to help the weakening rupiah.<\/p>\n
\"This national car project is not included in the projects
\nwhich will be rescheduled because it will strengthen the long-
\nterm foundations of the economy,\" Hutomo (Tommy) Mandala Putra,
\nPresident Soeharto's youngest son and Timor Putra's president,
\nsaid.<\/p>\n
A consortium of four state banks and 12 private banks decided
\nlast week, at the behest of the government, to disburse $650
\nmillion in 10-year loans to Timor Putra for the national car
\nproject.<\/p>\n
In addition to the $650 million in loans, Bank Dagang Negara
\n(BDN), as the consortium's leader, earlier disbursed $40 million
\nin bridging finance to Timor Putra.<\/p>\n
The loans carry an annual interest rate of about 3 percent
\nover three-month-to-six-month deposit rates and mature in 10
\nyears, with a grace period of three years.<\/p>\n
BDN's president, Salahuddin Nya'Kaoy, said the four state
\nbanks would provide half of the $650 million and private banks
\nwould provide the rest.<\/p>\n
\"I reckon if a project generates added value to the state
\nthere is no reason for postponing its implementation,\" Tommy was
\nquoted by Antara as saying.<\/p>\n
President Soeharto, in his National Day Address last Saturday,
\ncalled on the business community to select projects for
\nimplementation carefully in view of the currency upheaval
\ncurrently confronting the economy.<\/p>\n
Soeharto said the government and business should review their
\ninvestment projects to ascertain which should be given top
\npriority and which should be postponed.<\/p>\n
\"If our project adds to the government's debt burden, we would
\nmeet the request (for postponement). But if the project creates
\nadded value, why should it be postponed,\" Hutomo said.<\/p>\n
Optimistic<\/p>\n
He said he remained optimistic about achieving annual sales of
\n40,000 Timor sedans, despite the rise in car prices caused by the
\nrupiah's depreciation.<\/p>\n
The government granted Timor Putra exclusive rights to
\nmanufacture a so-called national car last year. It is currently
\ncooperating with South Korea's Kia Motors Corp. to produce the
\ncars.<\/p>\n
Fully assembled Sephia sedans -- renamed Timor -- are
\ncurrently imported from South Korea because Timor Putra's
\nproduction facilities are still being built.<\/p>\n
The national car receives import duty and luxury tax
\nexemptions, reducing its cost by 60 percent compared to other
\ncars in the domestic market.<\/p>\n
Minister of Industry and Trade Tunky Ariwibowo has said the
\nTimor car project should be completed within two years to preempt
\nany decision of the dispute settlement process at the Geneva-
\nbased World Trade Organization (WTO).<\/p>\n
Japan, the United States and the European Union are currently
\ncontesting the legitimacy of the Indonesian national car policy
\nat the WTO. (vin)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/timor-car-project-wont-be-rescheduled-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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