Habibie defends loan for aircraft project
Habibie defends loan for aircraft project
JAKARTA (JP): The government has been forced to use
reforestation funds to finance the development of N-250 aircraft,
an influential minister says.
State Minister of Research and Technology B.J. Habibie told
reporters before attending a cabinet meeting here yesterday that
he had not proposed that reforestation funds be used for the
aircraft project, but that President Soeharto had made the
decision himself.
Habibie is also the president of the state-owned PT Industri
Pesawat Terbang Nusantara (IPTN), which has already produced CN-
235, a smaller version of the N-250, with Spain's Casa
Construcciones Aeronauticas S.A.
Minister of Forestry Djamaloedin Soeryohadikoesoemo told the
House of Representatives (DPR) in a hearing this week that IPTN
will get some Rp 400 billion (US$185 million) in interest-free
loans, which will be set aside from the interest of reforestation
funds, to finance the N-250 project.
Reforestation funds, currently accumulating at about Rp 2.8
trillion ($1.32 billion), have been collected from timber
companies which plan to cut trees in their concession areas.
In a separate interview, Djamaloedin said yesterday that the
Ministry of Finance was involved in the decision to allocate the
loan to IPTN.
"The Rp 400 billion loan will be regulated by a presidential
decree," Djamaloedin said, adding that all legal procedures have
been prepared to channel the money to IPTN.
Habibie added that the money will be used to support the
construction of the N-250, a 70-seat commuter turboprop plane,
whose feasibly studies were conducted in 1990 under the
supervision of the Agency for the Management of Strategic
Industries (BPIS).
Feasible
He said the studies showed that the project was both
economically and technologically feasible, adding that the N-250
is slated to make its debut on Nov. 10, in conjunction with the
country's national heroes day, with its maiden flight set for
Aug. 17, 1995, to commemorate Indonesia's 50th anniversary.
He said that the government, as IPTN's lone shareholder, had
lately faced some problems financing the ongoing project due to
oil price declines and the increase of the country's foreign debt
following the appreciation of the yen against the U.S. dollar.
"Frankly speaking, IPTN could solve this financial constraint
with its own funds from the sale of CN-235s. But we cannot do it
because it would cut into the research and development fund for
the CN-235," he said.
Habibie said that as of April 1994 IPTN had not received the
Rp 600 billion needed to develop the N-250, thereby prompting him
as well as Minister of Finance Mar'ie Muhammad to discuss the
matter with Soeharto.
"So I'm just doing my duty in accordance with the schedule of
the project and the wishes of the one entrusted with the mandate
of the People's Consultative Assembly," he said, referring to
Soeharto.
When asked whether IPTN could repay its debt, Habibie bluntly
replied, "You must know that the world aircraft market is 4,500
planes. We would reach our break-even point if we sell 259
planes. We hopefully can sell 707 planes."
He said that in Indonesia the project for N-250 production
will require only US$650 million, which is between one-third and
one quarter of a similar project in developed countries.
"They (developed countries) would have to spend about $1.5
billion to $2.5 billion to carry out such a project," he said.
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