ARARE sight indeed: B.J. Habibie warmly embracing Ali Sadikin. Praises were heaped upon Habibie, then also the chairman of state-owned shipyard PT PAL. “Running against the grain", he had the courage to invite Bung Ali, Sadikin's popular name, one of the signatories of Petition 50, a group of people critical of the New Order regime. This spectacular event took place nine years ago, at a ceremony marking the launching of Caraka Jaya vessels.
Now reduced to a heap of scrap iron, this giant shipbuilding project-don't forget Habibie had a penchant for mega projects-was originally planned for the building of 56 ships: 20 general cargo vessels, 12 semi-container vessels and 24 full-container ships. Fifteen of the last mentioned were said to be in a disassembled state in nine dockyards in Indonesia. Ditto today. One of the dockyards, Lampung-based PT Noahtu, has even been shut down. “Many of the engines and other items of imported equipment have gone missing," said a source in the government.
The Japanese and German governments provided loans to fund the building of these 24 vessels. The framework of the vessels needed Rp266.37 billion, which came from the investment fund account through PT Pann Multi Finance. A bad habit recurred. The project got stuck because it was marked up. The supply of engines and navigational instruments for one vessel, for example, costs US$6.5 million while one vessel only sells for US$7 million. This means, “The engines and the navigational instruments must actually cost less than US$4 million," said Joeswanto Karijodimedjo, Chairman of the Indonesian Association of Ships and Offshore Facilities Industry.
After being abandoned for five years, this project was taken over by the government in 1998 and was later handed over by PT Pann to PT Djakarta Lloyd. This shipping company could operate the vessels already constructed and was required to build 15 new ones. The project failed to start, however, because Djakarta Lloyd did not have the funds. Reportedly, some Rp175 billion would be needed for the framework of the vessels.
Another unsuccessful project under Habibie, was one for the construction of 31 Mina Jaya fishing vessels. The Spanish government provided US$200 million for this project, executed by PT Pann. Of this amount, US$182 million went towards the supply of vessels, US$12 million to PT Industri Kapal Indonesia (IKI) Makassar as the manufacturer and US$5.6 million to the Agency for the Assessment & Application of Technology for a transfer of technology.
Only 14 ships were built in Spain and later assembled by PT IKI. Two of them, operated by PT Makassar Mina Utama, a firm owned by Coordinating Minister for People's Welfare, Jusuf Kalla, have been troubled by technical problems. Seventeen more ships, the construction of which is yet to be completed, are now just a pile of scrap iron.
Late last year, the government set up an inter-ministerial team to continue the two projects. No decision has been made yet on how to handle them, though. When queried, Achdiat Atmawinata, Director General of Metal, Mechanical, Electronic and Multifarious Industries (ILMEA) of the Ministry of Industry & Trade, said he did not know much about this matter and delegated it to his staff. The solution offered by the ministry is that three of the 15 Caraka Jaya ships yet to be built, will each be given as a grant to Merauke regency, Nanggroe Aceh Darusalam province and North Maluku province. This will be a pure grant as the administrations of the three regions cannot afford to fund the building of these three ships. PT Pupuk Sriwijaya will build four others, against a compensation of US$2.25 million a ship.
“The remaining eight vessels will be built by PT Djakarta in cooperation with other investors," said Triharso, a staff member of the Directorate General, ILMEA.
Meanwhile, PT Sun Rise Jaya Makmur and PT Latoka Mina Raya have been appointed to build and operate 17 vessels. PT Pann has also proposed that 50 percent of its debt be written off, another 25 percent turned into the government's capital participation and the remaining 25 percent sustained as a loan. PT IKI has asked that its entire debt be turned into the government's capital participation.
For the Finance Ministry, however, it would be profitable to simply sell the engines and the navigational equipment, especially in the absence of clear contracts stating the debts incurred by the institutions related to this shipbuilding operation. “Habibie did not sign a contract on the amount of the interest or when the debts would fall due," said the source in the government. Hardly surprising, as this shipbuilding project follows the pattern of Habibie's other projects, which are generally known to be technology-intensive, capital-intensive and floated on dreams.
Agus S. Riyanto, Levi Silalahi
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