N-2130 jet plane project facing the axe

JAKARTA (JP): PT Dua Satu Tiga Puluh (DSTP), a company formed by former president Soeharto to finance the development of the N- 2130 passenger jet under B.J. Habibie, will likely be liquidated later this year.

DSTP president Saadillah Mursjid said many of the company's shareholders considered the jet development project no longer viable amid the economic crisis and had asked for DSTP's liquidation.

"But the final decision on the fate of the company will be decided at another shareholders meeting later this year," said Saadillah after a company shareholder meeting yesterday.

Soeharto founded DSTP in 1996 in his private capacity. The company started directly offering shares to the public in March 1997 at US$1,000 (Rp 2.4 million at the time) a share without being listed on the stock exchange.

Soeharto remains the company's president commissioner despite his recent downfall. He was absent from yesterday's meeting.

Under the financing agreement with the Bandung-based state company PT Industri Pesawat Terbang Nusantara (IPTN) in October 1996, DSTP would provide $2 billion for IPTN to design, develop and produce two types of N-2130 passenger jets and obtain at least three international certifications for the aircraft, including from the U.S. and Japan.

Officials and political leaders sitting on DSTP's boards of directors and commissioners do so in their personal capacity since the company is a private entity.

Oil businessman Arifin Panigoro, one of the shareholders who attended the meeting, said a majority of the shareholders asked for the company's liquidation, saying the aircraft project was no longer commercially viable and was instead imposing additional burdens on the nation and the already battered economy.

The project is being carried out by IPTN, which was formerly headed by B.J. Habibie as state minister of research and technology until his appointment to the presidency in May.

Prestige project

"This jet development is a prestige project of the previous regime which was actually commercially unfeasible right from its inception," added, Arifin who bought 1,000 DSTP shares for $1 million last year.

"Almost all DSTP shareholders, including myself, were coerced (by the government) to buy the shares," Arifin added.

Saadillah denied that a majority of the shareholders present yesterday, representing 80 percent of the total shares, demanded the company's liquidation.

He said some shareholders wanted DSTP to continue its operation but that the equity money collected from the public should not be invested in jet development but in other projects to promote public welfare during the crisis.

Shareholders who proposed the liquidation of the company wanted the equity capital to be reimbursed to the shareholders or be rendered to the government to finance public welfare promotion programs, Saadillah said.

He said the company had thus far sold 20 percent of its shares, collecting Rp 1.41 trillion ($100 million) in funds as of last month.

DSTP has channeled Rp 211.6 billion to IPTN and is keeping the rest in deposit accounts at three state banks: Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI) and Bank Dagang Negara (BDN).

Previously, the company had most of its money deposited at Bank Central Asia, owned by Soeharto's family and cronies.

According the company's report, corporations hold 58.11 percent of the shares, while individuals hold 17.73 percent, foundations and pension funds 16.98 percent and insurance companies 7.02 percent.

Minister of Communications Giri Suseno Hadihardjono, a DSTP director, said the N-2130 aircraft project was now in its preliminary design stage.

The N-2130, the second airplane to be designed and engineered entirely in Indonesia, is scheduled to enter the market by 2005. It is planned to hold 100 to 130 passengers and is designed to have a maximum speed of 900 kilometers an hour.

Indonesia's first locally designed airplane, the N-250 turboprop passenger plane, also made by IPTN, made its maiden flight in August 1995.

Habibie earlier estimated the world market would absorb some 3,200 N-2130 jets between 2005 and 2025. DSTP has to sell at least 326 of the jetliners to break even. (jsk)