CN-235 of the Royal Brunei Air Force (photo : Airliners - matthew Johnston)Government to evaluate defense-related SOEs
The government reaffirmed on Monday its commitment to support the domestic weapons industry by setting up programs for the Defense Industry Policy Committee (KKIP) to be implemented this year.
“This year’s programs include evaluating the performance of defense state-owned enterprises,” Defense Minister Purnomo Yusgiantoro told a press conference after a KKIP plenary meeting at the Defense Ministry.
“There are already plenty of funds for us to procure domestic-made weapons,” he said without giving exact numbers.
The one-day meeting also evaluated KKIP’s programs in 2010.
Purnomo, who heads the KKIP, said the government was also encouraging state defense companies to enter the ASEAN’s US$20 billion defense market.
Also at the meeting were State-Owned Enterprises Minister and KKIP vice chairman Mustafa Abubakar, Industry Minister MS Hidayat, Research and Technology Minister Suharna Surapranata, Indonesian Military (TNI) chief Adm. Agus Suhartono, National Police chief Gen. Timur Pradopo and Defense Deputy Minister and KKIP secretary Lt. Gen. Sjafrie Sjamsoeddin.
Executives from defense SOEs and other stakeholders also attended the meeting.
Mustafa said the state should empower defense SOEs, adding that a commercial approach would not be sufficient.
“We still have problems from the past, such as debts, which need to be resolved.“
Defense SOEs may need their organizations restructured, financial assistance and marketing drives,” he said.
Mustafa said that multi-year contracts had been awarded to defense SOEs to add and replace the TNI’s aging weapon systems.
“Defense companies have also received orders from foreign countries.
“They have received plenty of orders although have not yet reached an economy of scale or the break even point.”
Hidayat said while the country aimed to procure much of its weapons domestically, Indonesia might still need to create synergies with other countries for technologies it had yet to master through technology transfers.
The KKIP would allow users to define what they needed so that the Research and Technology Ministry could conduct necessary research, Suharna said.
The TNI and the National Police also asserted a commitment to use domestic-made systems, with Agus saying TNI would use as many local defense industries as possible.
Timur urged domestic defense industries to be competitive and efficient.
Currently there are three major state defense industries: aircraft maker PT Dirgantara Indonesia (PT DI), weapons and ammunitions maker PT Pindad and shipyard PT PAL Indonesia.
Sjafrie who recently returned from a visit to Brunei Darussalam, said the oil-rich sultanate has stated its interest in buying Pindad-made assault rifles and armored personnel carriers as well as increasing its fleet of PT DI-made CN-235 medium transport airplanes.
(The Jakarta Post)
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