Navy told to work within budget

Navy told to work within budget

JAKARTA (JP): President Soeharto, acknowledging the Indonesian
Navy's needs to bolster its fleet to defend the archipelago's
vast waters, says it still has to operate within the budget.

Soeharto however gave his full endorsement to the plan to
develop a Navy base in Teluk Ratai on the southern tip of Sumatra
by making a visit there yesterday.

The project has been mentioned as a candidate for the
government axe as the Ministry of Finance and the Agency for the
Research and Application of Technology (BPPT) is now haggling
over the budget for the Navy's ambitious development plan.

"I fully support the development of the main base in Teluk
Ratai," Soeharto said during a visit to the site yesterday to
launch the project. He said that given the government's budget
constraints, the base should be developed in phases.

The President, speaking without a text, stressed that the
Navy, and the Armed Forces (ABRI) for that matter, must fall in
line with the government's development program which puts
emphasis on improving the welfare of the people.

The Ministry of Finance has slashed the Navy's proposal for a
$1.1 billion budget to finance the purchase and refitting of 39
second hand warships from Germany. The budget includes spare
parts and ammunition, as well as for the construction of Teluk
Ratai base which will house some of these ships.

It has imposed a limit of $320 million for the entire package,
ordering the Navy to scale down their plans. The BPPT, which has
been appointed to handle the procurement, said it could only
bring the figure down to $482 million.

In the original budget proposal, the Teluk Ratai project was
to cost US$151 million. This item was excluded from the latest
proposal from BPPT.

The haggling between Minister of Finance Mar'ie Muhammad and
State Minister of Research and Technology B.J. Habibie became
public knowledge when the two were questioned in separate
hearings at the House of Representatives on Tuesday.

Costly

Soeharto in his speech stressed that a strong Armed Forces is
crucial for Indonesia to safeguard the fruits of development. He
acknowledged that strengthening the Indonesian Navy is a costly
venture yet emphasized that the nation needs a dependable force
to protect its territorial waters.

The German warships, comprising 16 corvettes, 14 tank landers
and nine minesweepers, come from the former arsenal of East
Germany. They are being earmarked to replace about 40 of the 80
aging ships now being operated by the Navy.

Soeharto yesterday defended Habibie from criticism of the way
he has handled the procurement, saying that he personally asked
the minister to handle the negotiations because he was familiar
with German officials and industrialists.

"We shouldn't make a big issue out of his appointment.
Certainly it was not because we didn't trust the officers in the
Ministry of Defense and Security or in ABRI."

He recalled that the idea to buy the ships first came from a
private entrepreneur but he subsequently backed out after finding
that there would be no commission from the deal. That's when
Habibie was asked to step in.

He stressed that the ships were sold at bargain prices, even
after the additional costs of refitting them were included.

Warning

The President warned that the controversy over the procurement
of the warships was fanned by people who had little knowledge
about the issue.

"They aired their views, further muddling the situation, set
one official against another, sowed mistrust between them to the
point of disrupting stability," he said. "We won't let them get
away. We will warn them, and if that doesn't stop them, we'll
take firm action."

He stressed that this had nothing to do with freedom of
speech, which is guaranteed by the constitution. "There are laws
on how to exercise this right, and any violation should be
punished."

Soeharto, accompanied by Mrs. Tien Soeharto, also went on
board the KRI Teluk Banten, one of the 17 warships from Germany
that had been delivered. From the ship, they witnessed 23 of the
Navy's ships pass by.

Soeharto also witnessed the presentation of five of the German
ships from Habibie to Minister of Defense and Security Edi
Sudradjat, who in turned handed them over to Navy Chief of Staff
Admiral Tanto Kuswanto. (emb)