House supports national car

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.