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)