Indonesian aircraft manufacturer IPTN will no longer receive state hand-outs, under sweeping economic reforms announced by the Jakarta Government under heavy pressure from the International Monetary Fund (IMF).
A halt to Government funding for the state-run aerospace company was one of the pre-conditions demanded of Jakarta in return for the IMF's $43 billion bail-out of the stricken Indonesian economy. IPTN has never fully opened its financial books and analysts have long suspected the Bandung company of having racked up considerable losses since its establishment in 1976.
Five years ago, a World Bank visit to Indonesia resulted in swingeing criticism of the country's spending on aerospace, while, in 1994, there was controversy over the diversion of re-forestation funds to help fund the N250 turboprop programme.
Indonesian President Suharto has announced that the cash-strapped company will in future be supported with "private funding". This unlikely to stop indirect state financial assistance reaching the manufacturer, which has been run for the last 21 years by Government research and technology minister, Bacharuddin Habibie.
IPTN has repeatedly claimed that its planned new $2 billion N2130 regional-jet development is a "non-government" programme, support for which comes from the sale of shares by the specially created financing vehicle PT Dua Satu Tiga Puluh (DSTP). The company is chaired by the Indonesian president and directed by the Government's cabinet secretary, while some of the shares have been sold to state investors and pensions schemes.
The establishment of the DSTP was in partial response to mounting criticism of direct Government funding for IPTN. Jakarta had pumped $1.6 billion into IPTN by mid-1996.
Source: Flight International
