House won't okay use of budget to cover jet deal

Adianto P. Simamora, The Jakarta Post, Jakarta

The House of Representatives will not approve the use of the state budget to reimburse the State Logistics Company (Bulog) for the US$26 million down payment for Russian-made jet fighters and helicopters, unless the budget is revised, a top legislator said on Thursday.

Abdullah Zainie, chairman of the Houses' budget committee, said that since the purchase of the jet fighters and helicopters was not included in the current budget, any use of the state budget to cover payments for the military equipment would require a revisions.

"The government must first propose a revision to the 2003 state budget for the House to meet Bulog's demand," said Abdullah.

Normally, the budget is revised in September.

Bulog recently asked the Ministry of Finance to reimburse it for the $26 million down payment it made for the purchase of two Sukhoi jet fighters and two Mi-35 helicopters.

The purchase was part of a $192 million countertrade deal signed by the Indonesian and Russian governments during President Megawati Soekarnoputri's visit to the country last April.

Russia will receive some 30 commodities and manufacturing products of equal value from Indonesia in return for the military equipment. The commodities including crude palm oil (CPO), textiles, coffee, rubber, chocolate, black pepper, electrical appliances and fishery products.

Minister of Industry and Trade Rini MS. Soewandi assigned Bulog to implement the countertrade deal with Russia. Bulog is now under the Office of the State Minister for State Enterprises.

Bulog paid the $26 million down payment to Russian state company Rosoboronoexport, after borrowing the money from state- owned Bank Bukopin with commercial interest.

The Ministry of Finance has refused to reimburse Bulog for the down payment, saying the ministry knew nothing about the transaction.

Anshari Lubis, director general for budgetary affairs at the Ministry of Finance, said on Wednesday neither Bulog nor the Ministry of Industry and Trade had invited his office to discuss the purchase of the aircraft.

It was reported that Minister of Finance Boediono had sent a letter to the House, asking about the possibility of using the state budget's "emergency fund" to reimburse Bulog.

Separately, economist Faisal Basri urged the government publicly to explain the whole process leading to the countertrade deal and the appointment of Bulog as the executor of the deal.

"The process of the purchase really went against budgetary guideline. The government must clarify this matter to the public so everyone knows the truth.

"Although I don't have any concrete data, I dare say that the deal has a hidden scandal," Faisal said.

Also, the Institute for the Development of Economics and Finance criticized Rini for the controversial countertrade deal.

In a statement, the institute said the deal not only violated existing regulations but also caused difficulties for various parties, including Bukopin and Bulog.