Budget for warships 'too high': Gen. Edi

Budget for warships 'too high': Gen. Edi

JAKARTA (JP): Minister of Defense and Security Gen. (ret.) Edi
Sudradjat acknowledged that the US$1.1 billion budget proposed
for the procurement of 39 warships from Germany is excessive.

"I tend to agree that it is too high," Edi told reporters
yesterday when asked to comment on the budget being proposed by
State Minister of Research and Technology B.J. Habibie who is
overseeing the procurement.

Edi said his office is still holding on to the $300 million
budget that was put forth when the plan to purchase the warships
from the former arsenals of East Germany was first proposed.

Habibie has denied press reports suggesting massive cost
overruns, saying that the additional costs include various items
that are necessary to bring the ships over and operate them.

Indonesia and Germany last year signed the agreement for the
purchase of 16 corvettes, 14 landing ship tanks and nine mine
sweepers. The first eight of these ships have already arrived.

Habibie said on Wednesday that the ships, although they are
battle ready, have to be refurbished because they have been
inactive for up to three years. They also have to install
additional equipment because they have to sail from Germany to
Indonesia.

The package also includes enough spare parts to last five
years and some 5,000 tons of ammunitions. In addition, the
proposed budget also includes the costs required to upgrade some
of the naval bases that will be the home bases for these new
ships.

Tempo magazine disclosed this week that the Ministry of
Finance Mar'ie Muhammad had rejected Habibie's proposed budget
and had asked to find ways of spreading the costs over a longer
period of time.

Habibie said his staff will disclose the details of the
proposed budgets in due time but emphasized that there are no
cost overruns as Tempo had suggested.

Edi yesterday also defended the plan to purchase the ships to
beef up the fleets of the Indonesian Navy, stressing that they
are not "scrap steel" as some critics have suggested.

"These ships were designed for combat, but then East Germany
dissolved," he said.

Habibie said on Wednesday that the age of these ships ranged
between three to seven years. He said he is confident that they
will all be in fine condition.

He pointed out that Vice President Try Sutrisno has inspected
some of the ships that had arrived at the Tanjung Priok port.
President Soeharto too will inspect the next batch, he added.
(rms/emb)