Sumatra governors agree to start airline company

Apriadi Gunawan, The Jakarta Post, Medan

The governors of nine provinces on the island of Sumatra signed here on Friday a Memorandum of Understanding (MoU) outlining regional economic cooperation that will result in a number of initiatives, including the creation of an airline to be named Sumatera Airlines.

The deal was signed at a meeting opened on Thursday evening at the Tiara Hotel here.

The governors of Nanggroe Aceh Darussalam; North, West and South Sumatra; Lampung; Jambi; Bangka-Belitung; Riau; and Bengkulu, agreed in the MoU that the airline would be funded by all provinces, with assistance expected from the private industries operating in the provinces.

Before the signing, South Sumatra governor Rosihan Arsyad told reporters that Sumatera Airlines would probably need total capital investment of Rp 860 billion (US$86 million).

"The money will mainly be derived from the provinces' regional budgets. It is hoped that the airline company will be in operation by 2005," he said.

During a media conference prior to the signing, North Sumatra governor T. Rizal Nurdin said that plans for the airline company were not just a dream.

"The plan was based on the fact that Sumatra has been lacking air transportation. Hopefully, in the future, all areas of the island can be reached by air. This is what has motivated us to establish the airline," he said.

Governor Rosihan denied speculation that prestige was behind the initiative.

"Sumatrans have been heavily reliant on ground and sea transportation. Whenever government officials want to fly, they also depend on the existing airlines and have to travel via Jakarta.

"If the North Sumatra governor wants to go to Jambi for an official meeting, he should first fly to Jakarta and then take another flight to Jambi. That has been happening so far."

He said that Sumatera Airlines would prioritize inter- provincial flights.

"But flights to other cities outside the island will be possible," he added.

The governors also agreed to establish other enterprises, such as a shipping line, as well as database and information networks.

The South Sumatra administration will coordinate the airline project and Jambi will be in charge of the shipping line, according to the MoU.

The development of road, railway and electricity networks is also covered in the agreement.