Indonesia turns to Russia for new fighters and helicopters

Indonesia and Russia are expected to seal a deal for eight Sukhoi Su-30MK fighter jets and four Mil Mi-35 attack helicopters in the next two months, with the agreement likely to be signed during an official visit to Moscow by Indonesian president Bambang Susilo Yudhoyono.

The deal, which also includes five cargo helicopters and two submarines, is reportedly worth $1 billion. Payment would be via export credits from Russia that will be integrated into the Indonesian budget over the next five years. Deliveries could start in late 2007 and should be completed in three years, say industry sources in Indonesia.

"Negotiations are ongoing as we speak and both parties are virtually at an agreement," says a Russian source. "It is just a matter of tying up the loose ends before the official visit, which is expected before the end of the year."

Jakarta has decided against buying new Lockheed Martin F-16s and upgrading its fleet as an alternative to the Sukhois, sources say.

Most of its F-16A/B fleet was grounded due to a lack of spare parts, following an 11-year partial arms embargo by the USA that was completely lifted only early in 2006. Indonesia was able to keep up to four of its 10 F-16A/Bs flying during those 11 years only by acquiring parts from third parties.

"The government is afraid that the Americans might impose another arms embargo. That would severely undermine the country's air defence. With the Russians, it is straightforward," says an Indonesian industry source.

Indonesia bought two Su-27SKMs and two Su-30MKs in 2003, but its proposed acquisition of a further 14 Su-30s was delayed by budget constraints, a change in the administration and a shift in priorities following the December 2004 Asian tsunami. It was not immediately clear which make of helicopters Indonesia plans to buy from the Russians.

Before these purchases, most of Indonesia's military equipment was made by US companies. Jakarta has included F-16 parts and engines as part of a package of US equipment it seeks to acquire using $13 million in foreign military financing funds frozen during the embargo, but the air force must secure additional money if it is to restore its original F-16 fleet.