Govt warns Army on chopper deal
The Jakarta Post, Jakarta
Controversy surrounding the purchase of Russian-made MI-17 helicopters by the Army has taken a new twist with the Ministry of Defense warning that the Indonesian government could be fined for late payment.
The ministry has written to the Army to take the necessary measures possible against parties related to the purchase for failing to fulfill the business contract.
The letter, dated March 1, said four MI-17 choppers should have reached Indonesia on Feb. 28, but as of today, there was no sign whether the Russian producer would send them here.
"Referring to the contract, any delay in the shipment will result in the responsible party being fined as much as 5 percent of the total value of the contract," the letter, signed by First Air Marshall Sis Anwar, the ministry's procurement director, stated.
"We (the ministry) ask the Army chief, through his assistant for logistics, to find out why the shipment of the helicopters has been delayed," the letter says.
A senior official at the Ministry of Defense, who requested anonymity, confirmed the authenticity of the letter and warned that the case could snowball out of control if the Army failed to respond.
The Indonesian Military (TNI) has come under fire following the delay in the delivery of four helicopters apparently priced at US$21.6 million ( what about mark up allegation? something like, (however, xyz has said the cost should be $17xxx) ) from Russian firm Rosoboronexport, a plan which had actually been pursued by the Army since 2002, when TNI Chief Gen. Endriartono Sutarto was appointed to the top military post.
The Army named PT Putra Pobiagan Mandiri (PPM) as the underwriter, but later on, the company, managed by Andy Kosasih, also asked Singapore-based Swifth Air Industrial Supply to aid him in the project.
The Ministry of Finance disbursed the downpayment of $3.24 million WHEN ? to the defense ministry, but PPM and/or Swifth kept the money after failing to provide a bank guarantee to the Russian company. PPM instead has been saving the money in one of its own accounts since the case surfaced two months ago.
On Feb. 17, Swifth Air reportedly paid the downpayment to Rosoboronexport.
The defense ministry has repeatedly complained that the appointment of PPM and Swifth Air as lender companies was not done in a transparent way. Responding to the complaint, Endriartono shifted the blame to the Army leadership.
One of the little-known Swifth Air directors is Djoko Subroto, a retired two-star general in the Indonesian Army and a former Army inspector general.
The House of Representatives has announced it would set up a working committee to investigate the case.
On Friday, members of the House commission I for political and security affairs summoned Kosasih and Bram H.D. Manoppo from Swifth Air for a closed-door meeting.
Legislator Effendy Choirie from the National Awakening Party (PKB) said before the meeting that the government should continue with the project, but called the controversy a result of "collective error."