IPTN will survive state funding cuts
IPTN will survive state funding cuts
JAKARTA (JP): State aircraft manufacturer PT IPTN says it will
survive a government decision to cut its funding as part of an
economic reform package.
PT IPTN President B.J. Habibie said the company's activities
would be unaffected because it was already self-sufficient.
"It's no problem really," Habibie, who is also State Minister
of Research and Technology, was quoted by Antara as saying
Saturday.
He maintained that the company was self-sufficient through the
sale of and orders for one of its main products, the 40-seat CN-
235 commuter aircraft.
The Bandung-based company is also testing a 70-seat N-250
turboprop and has plans to spend US$2 billion to develop a 130-
seat N-2130 passenger jet.
As part of a newly negotiated economic reform package, to be
implemented under the supervision of the International Monetary
Fund -- which has mobilized an about $40 billion rescue package
for Indonesia --, the government has not only cut IPTN funding
but also decided that IPTN can no longer raise loans
domestically.
This means that the firm's N-2130 jet project would have to be
entirely foreign funded.
Habibie said the lower rupiah exchange rate against the
dollar, quoted in New York at 8,300/8,800 Saturday, would help
aircraft sales which have recently been arranged through small
counter-trade deals.
"The (CN-235) aircraft began selling when the rupiah rate of
exchange against the U.S. dollar was about 2,500 rupiah. Now the
value of the dollar is much higher, that will be a source of
funds, won't it?.
"The proceeds from the sales of CN-235 are enough to pay for
the operations of IPTN," he said.
Habibie said the government's budget allocation to IPTN was
smaller than that to the National Institute of Sciences or Agency
for the Assessment and Application of Technology, two official
research institutes.
According to IPTN spokesman M.T. Satoto who spoke to reporters
in Bandung on Friday, IPTN has sold more than 400 of its products
since it was established in 1975, including 150 CN-235s.
Satoto said the company planned to "restructure" its
personnel. This would include reducing the number of foreign
technical assistants on some programs.
Last year, the company planned to transfer 4,000 employees to
divisions that will be established as subsidiaries.
"We are still looking at how many employees we actually need,"
Satoto said. (43/aan)