PT PAL asks govt to pay its liability
JAKARTA (JP): State-owned shipbuilder PT PAL has requested that the government pay its obligations to the company soon so that the company can start making money.
PAL's senior executive vice president, Suleman Wiriadidjaja, said yesterday that the company had not yet made a profit because of its financial burden, mostly inflicted by the government.
He said the government owes the company over Rp 250 billion (US$106.5 million).
"That's what's burdening us right now because we have to pay Rp 36 billion per annum out of the business in interest on debts inflicted by the government," Suleman told journalists at his office yesterday.
PAL is controlled by the Supervisory Board for Strategic Industries, which is chaired by State Minister of Research and Technology B.J. Habibie. It produces a wide range of vessels, from commercial boats to naval craft. Habibie is also the president of PAL.
Suleman said his company could not force the government to pay its obligations because the procurement contracts signed by both parties stipulated that payments would be met according to the government's financial capability.
"However, we call on the government to soon pay its obligations so we can clean up all the extraordinary liabilities in our book keeping," Suleman said.
He acknowledged that the government was still the largest of PAL's customers, having purchased US$600 million worth of vessels, mostly for naval ships, from the company.
Other large customers of PAL include state-owned companies such as the shipping firms, Djakarta Lloyd and Pelni, the Pertamina oil company and the PLN electric company.
Domestic private businesses are the smallest of PAL's customers because no special credit is available to them from government or financial institutions.
"Financing is the most crucial issue in marketing our vessels. Local consumers always find it difficult to find sources of finance when they want to buy our vessels," Suleman said.
He explained that two years ago his company signed a contract with PT Pan Maritim to build a 17,500 dead-weight-ton (DWT) container ship costing US$23.1 million. But the deal only materialized last March after Pan Maritim secured finance from the Export-Import Bank of Japan and the Sumitomo Trust Banking Group of Japan.
"This is, of course, not good for us because we are still committed to building the vessel at the same price as two years ago," Suleman said.
Soft loans
To help local shipbuilders, Suleman suggested the government or the central bank provide soft loans to those purchasing ships built by local dockyards.
He warned that if the government did nothing to help, local private businesses would continue to buy ships overseas, especially since the government has allowed foreign-made ships to be sold in Indonesia.
To help local dockyards, the government established PT PANN Multi Finance. Its purpose was to buy locally-made ships and aircraft, and lease them or sell them by installment.
PANN Multi Finance, with soft loans from the central bank, bought 32 Caraka Jaya 4,180 DWT container ships from PAL and leased them to local shipping operators.
"PANN Multi Finance does not buy and lease local ships anymore because it cannot readily get soft loans from Bank Indonesia," Suleman said.
To support its finance, PAL is trying to sell its ships overseas where finance facilities for purchasing ships are available.
He said that his company has overseas orders worth US$1.01 billion for dozens of ships from customers in Germany, Britain and the Netherlands.
"We can now compete with shipbuilding firms in Europe even without the government's support," Suleman said.
He said the newest foreign order was from Reederai F. Laeisz GmBH of Germany for two open hatch, 45,000 DWT ships. The German company had earlier ordered two similar bulk carriers from PAL.
Seatrade Gron. B.V. of the Netherlands has ordered four reefer ships of 500,000 cubic feet, with options for four more ships. Stephenson Clarke of Britain has ordered one bulk carrier of 18,500 DWT, with an option for one more ship. (rid)