Timor can be 'converted into a state firm'

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)