Research and technology minister B J Habibie wants the USA to buy components worth 30% of the value of any F-16 contract from Indonesian manufacturer IPTN. Sources say that it will be difficult for Lockheed Martin to offer offsets as the aircraft are built and paid for by Pakistan and stored in Nevada.
The USA is looking for buyers for the F-16s, in a bid to return the $658 million paid by Pakistan for aircraft which it never received.
Indonesian president Suharto has approved the purchase of nine F-16s to join 12 already in service. The aircraft are reportedly being offered for $13 million apiece, but Indonesia wants to pay only $9 million after offsets.
Jakarta initially demanded US export credits to buy the F-16s, but US law prevents the Export Import Bank from financing the sale of weapons.
Indonesia is holding out the carrot of an eventual requirement for 64 F-16s and wielding the stick of continuing talks with British Aerospace on buying more Hawks.
The air force has 24 Hawk 100/ 200s on order and says that it needs 20 more. Habibie says that IPTN has received offset work from BAe, relating to the first contract.
Source: Flight International
