Three countries eye PTDI aircraft

Rendi A. Witular, The Jakarta Post, Jakarta

Financial difficulties and labor problems now confronting state-owned aircraft company PT Dirgantara Indonesia (PTDI) does not seem to have dampened the interest of some potential customers in the firm's products.

PTDI president director Edwin Soedarmo said three countries -- the United Arab Emirates (UAE), Bangladesh and Malaysia -- have voiced interest in buying three CN-235 aircraft each. Each aircraft is worth some US$15 million.

"We are still negotiating with the governments of these three countries. The deal will depend on our performance in delivering the CN-235 ordered by Pakistan and Malaysia on time," said Edwin.

The firm is currently making two aircraft for Pakistan and another two for Malaysia. The orders from Pakistan and Malaysia are worth about $22 million and $32 million respectively.

PTDI paid a penalty of $300,000 in January this year for a three-month delay in delivering a military passenger plane to Pakistan due to the company's financial problems and disputes with its workers.

"Delivery performance is one of the requirements set by buyers for us to get orders. We expect to receive more orders once we manage to meet delivery deadlines. We hope there will be no further disruption to our production," said Edwin.

Libya is the other government which recently voiced interest in buying the CN-235. The interest was voiced last week during the visit of Seif al-Islam al-Qaddafi, the son of Libyan President Muammar Qaddafi, to the company's workshop in Bandung.

Edwin also said the company was building five aircraft ordered by the Indonesian Navy and three others for its Air Force. The aircraft ordered by the Navy should be delivered by the end of this year or early next year, while the Air Force wants to receive its aircraft in mid-2006. The order for the Navy and Air Force is worth about $50 million and $69 million respectively.

Apart from aircraft, the company has also planned to produce a simulator for the CN-235 and other planes, as well as manufacturing components for other aircraft producers.

Edwin said the Malaysian government and its air force had expressed interest in the simulator, which is priced around $12 million.

The company has also received orders from Boeing and British Aerospace. However, due to the lack of working capital, PTDI has not yet agreed to accept these orders.

PTDI was set up by the government of former president Soeharto in the 1970s as part of an ambitious project of the then influential research and technology minister, B.J. Habibie, to develop a hi-tech aircraft industry in the country, despite strong opposition from many economists at that time.

The company, however, has experienced difficulties in selling its aircraft, forcing the government to use taxpayers money to keep it afloat.

However, following the financial crisis of the late 1990s, the cash-strapped government could no longer support the ailing aircraft manufacturer, and in 2003 the company's management proposed laying off thousands of its employees as part of a restructuring program to keep the company from going bankrupt.