Siswono urges delay of car, jet plane projects
Siswono urges delay of car, jet plane projects
JAKARTA (JP): A cabinet minister has suggested that expensive
state projects such as the National Car and the development of
Indonesia's own jet plane should be temporarily halted, and
funding originally earmarked for them be reallocated for
transmigration.
Minister of Transmigration Siswono Yudohusodo also suggested
during a hearing at the House of Representatives yesterday that
the available funds be used to set up labor-intensive projects in
resettlement areas to provide permanent jobs for laid-off workers
and job-seekers who could not find any work in the cities.
"It's now time for us to boldly declare a delay to the
(National Car and the construction of N-2130 jet plane) projects
for the time being, and instead use their budgets to finance
government projects that give opportunities to help heal the
country's economic wounds," he told reporters during a break in
the meeting.
Siswono was referring to the carmaking operation run by PT
Timor Putra Nasional, which is controlled by President Soeharto's
youngest son Hutomo Mandala Putra, and the state-owned aircraft
manufacturer PT Industri Pesawat Terbang Nusantara's (IPTN) jet
development project headed by State Minister of Research and
Technology B.J. Habibie.
Following the agreement with the International Monetary Fund
(IMF) last month in exchange for the US$43 billion bailout
package, Soeharto announced that neither company would receive
state assistance any longer, including tax and credit privileges
to Timor Putra and state budget funds to IPTN. But he said both
projects would still continue, and Hutomo and Habibie have made
statements to similar effect.
Timor Putra enjoyed tax breaks and access to huge credit to
distribute Korean-made KIA Motors under the Indonesian brand
Timor until it was ready to manufacture them locally. The import
duty and luxury tax exemptions helped make production costs 60
percent less that those for other car manufacturers in Indonesia.
Last year, the government appointed a consortium of 13 state
and private banks to lend $690 million in a syndicated loan to
Timor Putra for its manufacturing plant. So far, there has been
no further announcement about whether the planned loan would
proceed.
Habibie has said the responsibility to find money for the N-
2130 would now rest with PT Dua Satu Tiga Puluh (PT DTSP), which
was established by Soeharto in 1996 to find financing for the
project.
The Bandung-based company is currently testing a 70-seat N-250
turboprop and has plans to spend $2 billion developing the 130-
seat N-2130 passenger jet.
Siswono said the money could finance the opening of 500,000
hectares of oil palm plantations that could no longer be
supported by the allocated budget for the 1998/1999 fiscal term.
"The palm oil production generated from the total area could
sustain the life of approximately 250,000 households or the
equivalent to 1.25 million people," he said.
Siswono urged the government to take such severe measures in
order to escape from the financial difficulties and relieve the
soaring unemployment.
"It takes astuteness, wisdom and most importantly courage to
boldly implement severe measures to overcome the current
difficulties," he said. (09)