National

Government to Change Defense Financing System
Saturday, 24 December, 2005 | 08:27 WIB

TEMPO Interactive, Jakarta:Defense Minister Juwono Sudarsono has stated that the government will stipulate the purchase of primary defense system equipment is to use more open and flexible or multi-year financing instead of a year to year financing system.

“We have established a plan for greater inter-departmental harmony in order to improve the defense industry by opening the possibility of more open and flexible or multi-year financing,” said Sudarsono.

The Defense Minister was speaking following a defense planning matter and defense industry meeting with Vice President Jusuf Kalla, SOE Minister Sugiharto, Minister of Research and Technology Kusmayanto Kadiman and representatives from the Ministry of Industry at the Vice President’s office in Jakarta on Thursday (22/12).

According to Sudarsono, the change in financing is due to the defense system requiring continuous and definite financing, and should also be in line with the revised state budget, which now uses the multi-year system.

State Minister for State-Owned Enterprises (SOE) Sugiharto said that the financing system needs to be changed because the Indonesian Military (TNI) requires continuous and definite financing for ordering for primary defense system equipment.

“Let’s just say that after sales should also be on a continuous basis,” added Sugiharto.

According to him, using a year to year financing system will create cause problems for the TNI in purchasing primary defense system equipment.

According to Sugiharto, purchases using multi-year system will enable the financing of primary defense system equipment through banks.

“There is no reason for government and private banks not to finance the purchase of national primary defense system equipment using a multi-year system,” stated Sugiharto.

Currently, Sudarsono said, the government has prioritized the purchase of transportation equipment and fast patrol boats.

It is estimated that 70 percent of the primary defense system equipment to be purchased will be transportation equipment and fast patrol boats. (Sunariah-Tempo News Room)