RI gives concessions to KL on plane, car deal
RI gives concessions to KL on plane, car deal
JAKARTA (JP): Indonesia agreed to give a number of concessions to Malaysia under last week's military aircraft and car deal between the two countries.
Indonesian State Minister of Research and Technology B.J. Habibie and Malaysia's Defense Minister Najib Abdul Razak last Thursday signed a US$224 million deal, under which Malaysia will buy six Indonesian-made CN-235 military transport aircraft.
In return, Indonesia will buy 20 Malaysian-made MD3-160 light trainer aircraft and 1,500 Proton cars. Of the 1,500 imported duty-free cars, 1,000 will be used as taxi cabs in Jakarta, with the remainder to be used by the government.
"We expect a similar order for next year, but there are indications it could exceed our forecast based on the strong demand in the open market," Najib said, adding that Indonesia does not set any quota on the number of Proton cars to enter its market duty free.
Normally, the government imposes a 175 import duty on assembled sedans and station wagons whose types are not assembled in Indonesia. Besides the duty, imported assembled vehicles are also subject to a 100 percent surcharge, on top of a 10 percent value added tax and a luxury tax of up to 35 percent.
In addition to waiving the import duty on Proton cars, Indonesia has also endorsed the move by Proton to set up an assembly plant within two years. This will be the second such plant for Proton outside of Malaysia after the Philippines.
Under last week's deal, Indonesia agreed to send some of its C-130 military transport aircraft to Airod Sdn Bhd's Subang facility for structural/life extension programs.
As reported by Malaysia's New Straights Times last Friday, the contract signing ceremony was almost canceled after the Indonesian Ministry of Tourism, Post and Telecommunications, which was buying the MD3-160 aircraft, made a request for last- minute changes in the specifications of the aircraft.
Habibie, however, solved the problem by asking the Bandung- based IPTN aircraft manufacturer to buy the aircraft and ordering it to make the necessary engineering modifications to the MD3-160 as requested by the ministry.
This is the first overseas sales of the made-in-Malaysia air- craft.
Asked why IPTN was buying the MD3-160 aircraft, Najib said this was because SME Aviation, which manufactures the aircraft, could not carry out some engineering modifications required by the Ministry of Tourism, Post and Telecommunications as the end- user.
Commenting on the agreement on overhauling the Indonesian Air Force's C-130 aircraft, Najib said two such aircraft were already in Subang undergoing the life extension/structural support programs.
The contract is expected to be worth 43 million ringgit (US$16.8 million), Najib said, adding that two more aircraft would be sent to Airod for similar work in 1996 at a cost of 69 million ringgit.
"Habibie has also agreed to make Airod the regional servicing and overhauling center for IPTN aircraft. This means all C-130s and CN-235s would be sent to Airod. So, this is an additional bonus for us under this package," Najib said.
He said that on the delivery of the CN-235s, the first three aircraft will arrive in Malaysia by November 1996 and the rest by March 1997.
Malaysia's last purchase from IPTN was in 1989, when it bought a Super Puma VIP helicopter for 26 million ringgit.
At last week's signing ceremony in Kuala Lumpur, Habibie spoke of his vision of Indonesia, Singapore and Malaysia combining their resources to spearhead the formation of a regional commercial aircraft consortium in the 21st century.
Habibie complained recently over the difficulties of selling his aircraft as a result, mainly, of the absence of export credit facilities, arguing that all IPTN's competitors on the international market supported their sales with export credit financing.
"Nobody pays cash for aircraft ... We should therefore be given such a facility so that we can compete under the same conditions," Habibie contended.
He added that President Soeharto had asked him to discuss the possibility of arranging export credits with the minister of finance and the governor of Bank Indonesia.
Minister of Finance Mar'ie Muhammad, however, has categorically rejected the possibility of providing such an export facility. "Where would we get such funds from?" he said. (rid)