RI expects 35% offset deal from Sukhoi purchase

JAKARTA (JP): Indonesia expects an offset deal worth at least 35 percent of the cost of the Sukhoi jet fighters and military helicopters it will purchase from Russia, a senior minister said yesterday.

Under such an agreement, state-owned aircraft manufacturer PT IPTN would produce several parts for the fighter planes, State Minister of Research and Technology B.J. Habibie said.

"We want to manufacture the primary structure components as we've done with Airbus, Boeing and F-16s," he said before meeting with President Soeharto at his residence on Jl. Cendana, Central Jakarta.

The Bandung-based company produced seven major components for the General Dynamics-made F-16 after the country bought some of the fighters in 1989.

Habibie said offset arrangements are commonly practiced in the international aviation industry.

"The 35 percent demand is quite reasonable," Habibie claimed without elaborating.

Habibie said it was Soeharto himself who determined the percentage.

The government opted earlier this month to buy 12 Sukhoi-30K jet fighters and eight MI-17-IV helicopters under a counter- purchase deal.

The total cost of the purchase has not been announced yet, but each Su-30K is estimated to cost US$34 million, $4 million more than F-16s previously offered by the United States.

State Minister of National Development Planning Ginandjar Kartasasmita and his entourage left for Moscow yesterday to finalize terms of payment, a spare part guarantee, and the right to manufacture components for the jet fighter.

Ginandjar said on Monday that the counter-purchase arrangement would cover 80 percent of the transaction value, while the remaining 20 percent would be paid in cash.

Some 20 commodities, such as palm oil, cement, textile products, rubber and coffee, will be offered to Russia.

Director General of International Trade at the Indonesian Ministry of Industry and Trade Djoko Moeljono has said that PT Prima Comexindo, a trading house owned by Hashim Djojohadikusumo, will be assigned the task of exporting palm oil, coffee and rubber as part of the countertrade deal.

Meanwhile Gatra newsweekly in its Aug. 16 edition disclosed that PT Dwipangga Sakti Prima would act as representative of Russian state-owned company Roosvoorouzhenie in the counter-trade process.

The Indonesian company is controlled by Soeharto's youngest daughter Siti Hutami Endang Adiningsih.

Indonesia had intended to purchase U.S.-made F-16 jet fighters. But continued pressure by the U.S. Congress about human rights issues prompted Soeharto to cancel the intended purchase. (prb)