Timor can be 'converted into a state firm'

JAKARTA (JP): Minister of Trade and Industry Rahardi Ramelan said here on Thursday that PT Timor Putra Nasional could be taken over and converted to a state firm if the controversial car producer did not settle its debt with the government.

"If the government confiscates the company's assets, the company must continue operating. The government could run it as a state company or sell it to private investors," he said after attending a House of Representatives plenary session on the antimonopoly bill.

Taking over the company and converting it to a state company would preserve the company's assets, he said, adding that the final decision on whether the government would take over the company would be made by the finance minister.

According to the Directorate General of Customs and Excise, PT Timor missed the Dec. 18 deadline to pay Rp 3.09 trillion (US$412 million) in backdated import duties.

Timor was given until Dec. 18 to pay backdated import duties which the company had been originally exempted from paying under special facilities extended by the government.

PT Timor, owned by Soeharto's youngest son Hutomo (Tommy) Mandala Putra, was served with a letter of warning giving it 14 days to settle its dues. If the money is not paid within 14 days, the company's assets will be seized and transferred to the State Receivership Agency.

In 1996, Timor Putra was awarded the rights to develop a national car by then president Soeharto. The company was given an exemption from import duties and tax exemptions to import assembled sedans manufactured by South Korea's Kia Motor Co.

The exemptions were granted on the condition that the company establish an assembly plant in Indonesia in its second year of operations and gradually increase the use of locally manufactured automotive components.

The company failed to fulfill the terms of the agreement and is now required to pay backdated tax and import duties on the 40,960 cars it has so far imported.

The national car program, according to Attorney General Andi M. Ghalib, was made possible because of the collusion of Soeharto and government officials.

Japan, the European Union and the United States filed a complaint against Indonesia with the World Trade Organization in Geneva last year and won a ruling in their favor.

Rahardi said that United States automotive giant Ford announced plans to expand its business in Indonesia during his visit in the U.S. earlier this month.

"Ford representatives will come to Jakarta soon to look into the possibility of making a big investment here. The company wants to expand its role in Indonesia's automotive industry," he said.

He said that Ford planned to invest here earlier, but the move was canceled because of the U.S. government's opposition to Indonesia's national car program.

"So they have decided to come back after seeing that we have settled the problem satisfactorily." (gis)