Pismatek cancels car deal

Pismatek cancels car deal

JAKARTA (JP): PT Pismatek Group from Pekalongan in Central
Java said yesterday it had canceled its plan to produce
automotive components for the Timor car project.

Pismatek Group president Djamal Ghozi said the company won a
contract several months ago to supply pistons to the Timor car
project, owned by Hutomo Mandala Putra, the youngest son of
former president Soeharto.

"We have to cancel the plan because the Timor car project
involved corruption, collusion and nepotism," Antara quoted him
as saying.

The Timor, dubbed the national car, sparked controversy in
domestic and international markets in 1996 when it exclusively
received import duty and luxury tax exemptions to import cars
from Korea's Kia Motor Corp.

The incentives enabled PT Timor Putra Nasional, part of the
Humpuss Group owned by Hutomo, alias Tommy, to undercut all other
car manufacturers in the country by 60 percent.

But under the economic agreement signed between Indonesia and
the International Monetary Fund, in exchange for a US$43 billion
bail-out package, the special tax facilities were removed.

Djamal said Pismatek Group would continue its business
activities despite having no alliance with a power-related
business group. (aly)