IPTN chooses Alabama city as investment site
IPTN chooses Alabama city as investment site
JAKARTA (JP): The president of PT Industri Pesawat Terbang Nusantara (IPTN) B.J. Habibie said here yesterday that the government has finally settled on a site for the state-owned aircraft manufacturing's assembly plant in the United States.
"The President has decided to choose the town of Mobile in the state of Alabama as the location for IPTN's assembly plant to manufacture Indonesian-designed N-250 aircraft," Habibie, who is also the State Minister for Research and Technology, told reporters prior to a meeting with President Soeharto at the Merdeka Palace here.
Habibie said the planned assembly plant, which will be owned 100 percent by IPTN in the preliminary stages of operation, will be incorporated under the name of American Regional Aircraft Industry (Amrai) with a total investment of a mere US$12 million.
"Do not be surprised -- it (the investment) is really only $12 million," he said.
Interestingly, the price of one N-250, a 70-seater passenger plane, is about $13.5 million. The turbo-propeller plane is being marketed as a commuter plane, Habibie said.
The plane is also designed with fly-by-wire guidance technology, the first for an aircraft of its size, according to Habibie.
He also said that the official signing to incorporate Amrai will be conducted in Paris on June 13 during an airshow event.
Habibie said that for the proposed signing, the United States will be represented by the mayor of Mobile and the governor of Alabama, while he personally will represent IPTN.
$1 a year
For the past year, the states of Arkansas, Alabama, Georgia, Oregon and Utah have reportedly been bidding to become the site of IPTN's factory in the United States.
The reason why Mobile was picked, Habibie said, was because the city "will soon give IPTN 14.5 hectares of land already asphalted and with electricity, telephone lines and road infrastructure with a rent payment of one dollar a year."
No Alabama state officials were available for confirmation yesterday.
The German-trained minister explained that IPTN would assemble only aircraft bodies, whose engines are to be supplied by as-yet- to-be-named venders.
"We want to capture the North and Latin American markets," Habibie said, adding that IPTN would gradually sell about sixty percent of Amrai's shares through direct-placement transactions.
In April, the Indonesian government announced that the German state of Niedersachsen would be the site for IPTN's European assembly plant. No financial details have been given for the German project.
Various economists have been criticizing IPTN and other strategic industry companies run by Habibie as inefficient with low returns of investment, calling them "Indonesia's white elephants."
Habibie, who is also a senior consultant to the board of directors of German aircraft company Meerschmitt Boelkow Bohm, says the inefficiency of his projects has been caused by a lack of credit-export facilities.
Such facilities, which would involve credit subsidization for buyers of the projects, are reportedly being studied by Indonesia's financial authorities. (hdj)