IPTN to go ahead with passenger jet project

IPTN to go ahead with passenger jet project

JAKARTA (JP): State aircraft manufacturer PT Industri Pesawat
Terbang Nusantara (IPTN) has said it will go ahead with its plan
to build Indonesia's first passenger jet despite the current
monetary crisis.

IPTN chief project officer Ilham Akbar Habibie said in Bandung
Friday that there was no reason to delay the US$2 billion N-2130
jet program which began in 1994.

"We will continue this project. The project has now reached
the full design stage, and the design has been tested in wind
tunnels abroad," Ilham told Antara.

He made it clear that IPTN had no reason to postpone the
project, especially since development and marketing would cover a
span of 20 years.

Ilham firmly denied the International Monetary Fund (IMF) had
demanded the delay of the jet project or listed it as part of the
deal to support the IMF-led bailout program.

The government has entered an agreement to secure an IMF-led
international financial bailout package worth $40 billion. As
part of the deal, Indonesia has to clean up its banking industry,
cut back state-related projects and create at least a 1 percent
surplus in the 1998/1999 State Budget.

The government agreed to reschedule a series of high-profile
projects as part of reforms hammered out with the IMF, but the
country's local plane industry was left off the chopping block.

IPTN's announcement not to delay the project came after the
embattled rupiah plunged to a record low of 10,000 against the
U.S. dollar in Singapore trading Thursday. The greenback has gone
up more than 300 percent in value against the rupiah since early
July.

Bandung-based IPTN is headed by State Minister of Research and
Technology B.J. Habibie, who is also Ilham's father.

Ilham said financial resources for the N-2130 project did not
come from the government, but were provided by PT Dua Satu Tiga
Puluh (DSTP).

President Soeharto, in his private capacity, established DSTP
in 1996 with equity capital of $400 million.

The estimated cost of the project is $2 billion, with $1.19
billion of it expected to come from the sale of DSTP shares until
2006, when the jets will be ready for sale.

It is estimated DSTP raised about Rp 600 billion from the sale
of shares to the public last year alone.

DSTP shareholders approved the plan in February to sell
774,398 shares for Rp 2.4 million each and 400,000 shares for Rp
5,500 each.

DSTP and IPTN signed a financing agreement for the production
of Indonesia's first passenger jet in 1996.

Under the agreement, DSTP will provide $2 billion to IPTN to
design, develop and produce two types of N-2130 passenger jets
and to obtain at least three international certifications for the
aircraft, including from the U.S. and Japan.

The N-2130, which is the second airplane to be designed and
engineered entirely in Indonesia, has a passenger capacity of
between 100 and 130 people and a maximum speed of 900 kilometers
an hour.

The national jet project was launched in 1994. It is scheduled
for completion in eight years, with its maiden flight in 2002 and
its delivery to three national airline companies two years later.

Indonesia's first locally designed airplane, the N-250
turboprop passenger plane, made its maiden flight in August 1995.

Ilham said IPTN was considering proposals from three aircraft
engine manufacturers for the N-2130, namely CFMI, a joint venture
company between General Electric of the U.S. and France's Snecma,
Germany's BMW-RR and Pratt and Whitney.

The choice among the three engine builders will be announced
at the ASEAN air show, which will be held in Singapore from Feb.
24 to March 1, he said. (gis)