No reforestation funds for N-2130 aircraft construction

No reforestation funds for N-2130 aircraft construction

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
affirmed there are no plans to use reforestation funds for the
construction o the N-2130 jet aircraft planned by PT Industri
Pesawat Terbang Nusantara (IPTN).

"So far I have not seen any possibility of using reforestation
funds to construct the N-2130," he was quoted by Antara as
saying.

Djamaludin was responding to questions on whether the planned
construction of the aircraft, which will be designed, engineered
and constructed by IPTN, would be funded in the same way as its
predecessor, the N-250, Indonesia's first domestically-designed
commuter plane.

The N-250 accomplished its maiden flight last Thursday. Its
construction, which required Rp 400 billion (US$180 million) in
interest-free loans derived from the reforestation funds, sparked
controversy last year as critics charged that the use of the
funds deviated from their real purpose of maintaining the
sustainability of the nation's forests.

Djamaludin, quoting President Soeharto's statement in a press
conference last Thursday, said that funding for the N-2130 would
not be taken from the state budget, but from revenues collected
from the public offerings of a number of viable state-owned
firms.

The N-2130, whose prototype is expected to be ready to fly by
2003, will require at least US$2 billion for its construction.

Djamaludin said in a hearing with House members last June that
over the last five years, his office had collected Rp 3.04
trillion in forest contributions and more than Rp 500 billion in
interest.

Although adamant that forestry related funds will not be used
to further support the development of aircraft, Djamaludin
acknowledged the importance of expanding the country's aircraft
industry. He said that judging from the high-priced product that
it sells, the aircraft industry must be a profitable one.

"Obtaining high revenues from wood can only be done by cutting
down many trees. Since the aircraft industry is a high-profit
one, it shouldn't rely on heavy logging -- which will have a
negative impact on the environment," he said.

Mandatory reforestation funds, which are collected from forest
concessionaires and calculated based on the type and volume of
timber felled, are registered under the ministry's bank account
and used strictly for development of forests.

However, a law is presently in the making to include the funds
as part of the state budget's non-tax revenues.

Djamaludin stressed that the International Tropical Timber
Organization, of which Indonesia is a member, has requested its
members to set aside special funds for reforestation attempts,
thus forest preservation efforts would not have to rely on the
state budget.

Rice fields

Commenting on the use of the interest on reforestation funds
for the construction of infrastructure needed to create new rice
fields, Djamaludin said that because rice is a vital foodstuff in
Indonesia, its production must be considered top priority.

It was reported last week that the government will earmark Rp
500 billion to finance the construction of the infrastructure
needed to create 1.4 million hectares of new rice fields in
Kalimantan.

Indonesia, formerly the biggest rice importer in the world,
became self-sufficient in rice in 1984. But it began importing
rice again last year due to a fall in production.

As a solution, crash programs -- including intensive planting
projects and the clearing of swamp areas in Central, South and
West Kalimantan to make way for the establishment of new rice
fields, have been designed, with construction of infrastructure
planned for the middle of next year.

Several parts of the swamps, however, overlap with the land
granted for the use of forest concessionaires and industrial
timber estates.

Djamaludin was quoted by Antara as saying that there would be
no compensation given to concessionaires whose timber estates
overlapped the planned rice estates, which will cover an area of
one million hectares in Central Kalimantan, 200,000 hectares in
South Kalimantan and 200,000 hectares in West Kalimantan.

In Central Kalimantan alone, 27 concessionaires with rights to
an area of 409,585 hectares have territory overlapping with the
planned project.

Djamaludin said that no compensation will be given to the
concessionaires "because now there is no such thing as a free
forest".

He said that most of the concessionaires operating in the
overlapping areas had not managed their forest areas favorably,
thus their concessions would not be extended.

Djamaludin ensured that wood-based companies which relied on
supplies of raw material from the timber estates in those areas
would get an adequate supply from state-owned enterprises.

Antara reported that only one plywood mill obtains its
supplies from the concessionaires located in the overlapping
areas, while the other firms which rely on that area are
sawmills. (pwn)