House supports national car

JAKARTA (JP): House Commission V for industry and trade has suggested that the government save the national car project developed by PT Timor Putra Nasional from bankruptcy and bring in new investors to continue the project.

"However, Hutomo Mandala Putra, the youngest son of former president Soeharto, should sell his shares in the project," Anthonius Rahail of the commission said in a statement after a meeting with Minister of Industry and Trade Rahardi Ramelan last week.

Rahail said the commission learned during a recent visit to the Timor car project in Cikampek, West Java that the company had invested US$455.8 million in the car assembly project, a big portion of which was derived from state banks.

The national car project, formerly developed in a joint venture with South Korean KIA motors, is now in deep trouble as Timor Putra failed to achieve the local content requirement set by the government as a precondition to its exemption from import duties and a luxury sales tax.

Consequently, the company was required by the government to pay all import duties and luxury sales taxes which were waived for its imports of built-up cars from Korea between 1996 and 1998.

The case is pending a court decision.