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)