DPR plans to probe Mi-17 purchase

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The House of Representatives Commission I has planned to set up a working committee of inquiry into alleged irregularities in the procurement of four Russian-made Mi-17 helicopters worth US$21.6 million by the Army.

Commission member Effendy Choirie said on Monday he had been informed that the helicopters, which were intended to carry personnel, should have been valued at $17.6 million.

"There might be $4 million in state losses but senior officials of the Ministry of Defense claim they do not know anything about the report. We need a working committee to probe this," Choirie told a hearing with the defense ministry's senior officials.

He said the Ministry of Defense should be taught a lesson that it could not arbitrarily conduct a tender.

The contract to buy the helicopters was signed in December 2002 by Army chief of staff Gen. Ryamizard Ryacudu, representing the defense minister, and Wirjadi Handaja, the director of Swifth Air & Industrial Supply Pte. Ltd., a Singapore partner of PT Putra Pobiagan, the winner of the tender.

Putra Pobiagan never signed the contract,Tempo Magazine reported,

To add to the confusion, Swifth Air failed to transfer US$3.2 million as a down payment to Russian firm Rosoboronexport Rusia, although it had received the money from the Ministry of Finance.

The helicopters are scheduled to arrive here by the end of this month, but Rosoboronexport has reportedly stopped assembling the helicopters following the payment problem.

Meanwhile, the ministry's director general for budgetary affairs Mas Widjaja said the contract to procure the helicopters should not be signed as the winner did not provide a bank guarantee from a state-owned bank.

According to him, the winner instead submitted a bank guarantee worth 5 percent of the total amount of the procurement from Bank Yudha Bakti, which is a private bank.

The Mi-17 helicopters, which have been used by some 50 countries, have a maximum capacity of 30 personnel, while Bell helicopters currently operated by the Army can only carry eight personnel.

The Mi-17 helicopter has a maximum speed of 250 kilometers per hour with a maximum distance of 1,065 kilometers per flight.

It can be loaded with 13 tons of goods and can fly even if one of its two engines does not work.

The Indonesian Military (TNI) has reportedly planned to buy 24 Mi-17 helicopters in stages, with four in 2003, six in 2004, and six in 2005.