All ears: Defense Ministry secretary general Lt. Gen. Sjafrie Sjamsoeddin (from left), Air Force Chief of Staff Vice Marshal Imam Sufaat and director general of defense facilities Vice Marshal Eris Herriyanto listen to a participant’s questions at a discussion on revitalizing the domestic defense industry held at the Defense Ministry on Tuesday. JP/P.J. Leo
Indonesian state-owned defense industries requested the government to provide protection by fully utilizing their existing capabilities and provide regulation and financing facilities.
The requests were expressed Tuesday during the second session of a series of discussions held by the Defense Ministry to revitalize Indonesia’s defense industries as part of President Susilo Bambang Yudho-yono’s 100-day program.
The second session focused on the capabilities of the state-owned defense industries and what obstacles they faced in fulfilling the needs of the Indonesian Military (TNI) and the National Police. The first session on Nov. 18 focused on what end users needed.
Speaking Tuesday, among others, were the directors of steel producer PT Krakatau Steel Fazwar Bujang, arms and munitions maker PT Pindad Adik Avianto Soedarsono, shipbuilder PT PAL Harsusanto and aircraft manufacturer PT Dirgantara Indonesia Budi Santoso.
Adik, for example, expected the government to integrate its procurement program into a continuous policy so that defense companies might better plan their production cycle.
“Most procurement is made at such short notice that it is prone to delay,” he told the meeting.
“The procurement of expendable goods, such as munitions, should be made years in advance with long-term contracts.”
Adik also suggested that payment schemes should be structured according to progress instead of upon delivery.
He also suggested prioritizing domestic weapons by setting up a road map of what the TNI and police need over the next five years.
“This way we can synchronize with other defense industries and stakeholders,” he said.
He also requested the abolition of taxes for required materials and detailed regulations on the use of domestic financing sources.
Most of the defense firms shared similar problems and requests.
Meanwhile, Harsusanto asked the government to require that all warships bought abroad be built at PT PAL’s facilities in Surabaya as part of transfer of technology.
“This way, we can learn how to produce such warships on our own,” he said.
Separately, Defense Ministry secretary general Lt. Gen. Sjafrie Sjamsoeddin told reporters the series of discussions revealed that many of the needed weapons could actually be produced at home but were not supported by policy makers.
“Therefore we expect to make a commitment for the 2010-2014 period prioritizing the use of domestic weapons,” he said.
“We will also amend a presidential decree on procurement to fulfill TNI weaponry needs from domestic defense industries.”
He said the National Development Planning Agency had prepared Rp 800 billion (US$84.21 million) to buy local weapons in 2010, although the allocation of the fund was not yet determined.
Sjafrie also said producers needed users to provide financing schemes and exact specifications to prepare their production.
“The financing scheme would be discussed on Dec. 1 when the banking community will discuss their commitment,” he said.
Finance Minister Sri Mulyani is set to attend the third session.
Adik also suggested that payment schemes should be structured according to progress instead
of upon delivery.
