IPTN to invest in U.S.

IPTN to invest in U.S.

Before meeting with President Soeharto at the Bina Graha
presidential office recently to report on his recent visit to the
United States, State Minister for Research and Technology B.J.
Habibie told reporters that the IPTN will produce three N-250
planes a week and market 50 percent of the aircraft in the U.S.
and Canada. The cost and investment to establish this project
will be US$100 million, which will be derived from government
funds and IPTN equity. Several Governors in the U.S. including
those from Alabama, Arizona, Oregon and Utah want IPTN to use
their states as the sites of the project.

It interesting to note what the minister added, that the
investment cost in the U.S. will likely be lower than in
Indonesia, that land prices are very inexpensive compared to
those in Indonesia. This is hard to believe, indeed.

Another advantage is, according to Habibie, that operating the
project in the U.S. will benefit IPTN more, because deliveries
will be quicker and cheaper. The necessary feasibility study will
be completed as soon as possible within this year. Habibie will
report to the president.

If such an investment is made by a private company abroad, one
may wonder if that is not capital flight. It is supposed that
this project in the U.S. will be put in the category of long-term
projects so that the project like the IPTN project doesn't have
to be called into account.

Habibie also explained that the International market will need
some 6,700 aircraft within the next 20 years and the U.S. will be
the biggest market for aircraft with turbo-prop engines such as
the N-250.

It sounds nice and is too good to be true, seen from the
viewpoint of a layman. Let us therefore wait and see until we get
to see the study, which hopefully will be disclosed publicly.
Normally such government project need approval from the House of
Representatives. The Indonesian people are curious whether or not
this project will turn out to be feasible.

A. HARYONO

Jakarta