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.