House Claims False Promises On Dutch Ship

Markus Junianto Sihaloho

Lawmakers said in Jakarta on Wednesday that they felt they had been cheated by the government on a recently signed deal to buy a naval destroyer for $220 million.

Tubagus Hasanuddin, deputy chairman of the House of Representatives’ Commission I, overseeing defense and foreign affairs, said the House had only agreed to buy the warship because they thought Dutch shipyard Damen Schelde Naval Shipbuilding (DSNS) was going to build the ship in Indonesia and let state shipmaker PAL Indonesia take part in its construction.

The House believed the deal would allow for a transfer of technology to PAL, said Hasanuddin, from the Indonesian Democratic Party of Struggle (PDI-P).

However, the copy of the contract he got revealed that the ship would be built in the Netherlands, not in Indonesia, and that PAL only got a $7 million contract, or less than 3 percent of the total contract value.

“We will ask for clarification from the defense minister as soon as possible,” Hasanuddin said.

Commission I chairman Mahfudz Siddiq said the transfer of technology was important for Indonesia to be able to develop its own defense capabilities.

If not for the transfer of technology, Mahfudz said, the House would never have agreed to buy the warship.

Hasanuddin questioned why the government had decided to go with DSNS, while Orizzonte, an Italian shipbuilder, had made an offer develop a similar warship with 25 percent local participation.

“The Italian company has been ready to involve other Indonesian companies, such as [arms manufacturer] Pindad and Krakatau Steel,” he said.

The Defense Ministry has already cooperated with companies from South Korea under the transfer of technology concept, Hasanuddin added.

President Susilo Bambang Yudhoyono has attempted to boost the country’s defense capabilities and independence by allowing local defense contractors to work with their counterparts from more advanced countries.

“However, this type of cooperation with the Dutch company will not support the president’s ambition,” Hasanuddin said.

(Jakarta Globe, 8 June 2012)