Government owes BPIS Rp 800b, claims executive
Government owes BPIS Rp 800b, claims executive
BANDUNG (JP): The government, in particular the Indonesian
Military (TNI) and National Police, owe some Rp 800 billion
(US$80 million) in outstanding debts to subsidiaries under state-
owned holding company PT Bahana Prakarya Industri Strategis
(BPIS).
BPIS President Surasno Paramajuda said here on Wednesday that
much of the debt was incurred during the acquisition of military
equipment and aircraft during times of emergency.
However there seems to be no immediate expectation of a
resolution as the government has given an indefinite deadline for
repayment of the debt.
"Because these companies are state owned, there is a clause in
the contract which states that payment is made in accordance with
the government's financial ability," Surasno remarked, during a
visit of Army Chief of Staff Gen. Endriartono Sutarto here.
Established in 1989, BPIS serves as an agency for the
development of strategic industries that comprises 10 companies.
The 10 companies are: aircraft manufacturer, PT Dirgantara
Indonesia; ship manufacturer, PT Pal; steel producer, PT Krakatau
Steel; weapons and ammunition producer, PT Pindad; explosives
producer, PT Dahana; train manufacturer, PT Industri Keretaapi
(Inka); heavy industry company, PT Barata Indonesia; industrial
equipment manufacturer, PT Boma Bisma Indra (BBI);
telecommunications manufacturer, PT Industri Telekomunikasi
(Inti); and electronic component producer, PT Len.
According to Surasno the greatest debt was owed to PT Pal
amounting to some Rp 300 billion, PT Dirgantara Indonesia Rp 200
billion and PT Pindad Rp 100 million.
While stressing that he understood the current fiscal problems
faced by the government, Surasno lamented that these debts
negatively affected the companies' cash flow.
One reason for the slow repayment was also the limited budget
allocated to the military and police, which annually accrue more
debts.
To survive, these companies were making in-roads by producing
more commercial products, such as electrical generators and palm
oil processing equipment.
Meanwhile Endiartono, during the visit to PT Pindad, refuted
suggestions that the weapons manufacturer and TNI had supplied
weapons or ammunition to the Free Aceh Movement (GAM).
"The caliber 5.56 is standard military ammunition. But TNI or
Pindad are not the only ones who produce it. It doesn't always
come from us," Endiartono asserted, adding that such ammunition
is used around the world.
It was reported earlier by several local media that some TNI
soldiers had been supplying ammunition to the separatist group
since rebels in Aceh had been found widely using the same type of
ammunition.
Endriartono further remarked that the police have yet to ask
the Army to help restore peace in Aceh. Nevertheless the military
are preparing themselves as the government has decided to deploy
more soldiers in the restive province.(25/dja)