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)