The Jakarta Post
The House of Representatives' Commission I has approved the disbursement of US$250 million this year to state-owned shipyard PT PAL to build the country's first submarine with technical assistance from South Korea.
Commission I deputy chairman TB Hasanuddin said that the construction would start in April.
Indonesia signed a contract in 2011 with Daewoo Shipbuilding and Marine Engineering (DSME) to build three submarines worth some $1.07 billion. Two will be built in Korea while the third will be built in PT PAL's facilities in Surabaya, East Java.
The contract requires that the work starts in Surabaya by November at the latest otherwise the contract will be void and the third one has to be built in Korea.
'We approved the plan and appointed the Finance Ministry to channel the funding to PT PAL through the State-Owned Enterprise Ministry as bridging finance,' Hasanuddin said in a coordination meeting with several ministries, the Navy and the Army on Monday afternoon.
PT PAL needs the additional capital not only to improve its financial position but also to acquire specialized equipment to build submarines. The company has the capability to build surface ships but not submarines.
Deputy Finance Minister Bambang Brodjonegoro said the funds would be injected as state capital (PMN) over three years.
He said the government would disburse $180 million this year consisting of $30 million for consultation costs and $150 million for infrastructure. The remaining $70 million is for personnel.
Defense Minister Purnomo Yusgiantoro said that that the PMN would have value-added benefits for the local defense industry, including the ability to meet the need for 12 submarines by the Navy to ensure adequate defense.
Purnomo added that the South Korean technical assistance had begun in 2013, with the sending of Indonesian engineers to that country to learn the techniques of submarine manufacturing.
'The third one will be constructed by 200 Indonesian engineers and under the supervision of DSME,' he said.
'There will be a transfer of technology in this project.'
Previously, Navy chief of staff Adm. Marsetio said that Indonesia currently had two German-made submarines, KRI Cakra and KRI Nenggala, which were built in the 1980s. They will be decommissioned in 2020. (gda/nvn)
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