Malaysia to rethink Indonesia plane deal

Malaysia to rethink Indonesia plane deal

KUALA LUMPUR (Antara): The agreement by the Malaysian Armed
Forces to purchase the Indonesian-made CN-235 carrier aircraft to
transport its troops will be reviewed following the latest
developments involving the manufacturer and Indonesia's economy.

Defence Minister Syed Hamid Albar said yesterday the ministry
would have to re-discuss the agreement with the Indonesian
authorities as it did not know the status and future of the
manufacturer, IPTN (Industri Pesawat Terbang Nusantara), now.

The issue now was about whether Malaysia would acquire the
aircraft and not about its ability to pay, he told reporters,
here.

Malaysia signed an agreement to buy six of the aircraft in
February, 1991, at a cost of RM286 million (US$1 = RM3.8) but so
far the armed forces have yet to take any delivery.

IPTN, headed by B.J Habibie, who was Technology and Research
Minister before his appointment as Indonesian vice-president last
week, was to have delivered some of the aircraft in December 1996
and the rest last year. But none of them has been delivered.

Under the agreement, Malaysia will sell Indonesia about 1,500
units of the made-in-Malaysia Proton Saga cars for use as taxis
and 20 MD3-160 light training aircraft made by SME Aviation Sdn
Bhd while Airod Sdn Bhd will overhaul Indonesian military
aircraft at its hangar in Subang, near here.

Syed Hamid said the CN-235 was supposed to replace the Caribou
aircraft which was still being used by the Malaysian Armed Forces
although they were more than 30 years old.