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. (09)