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