MINISTER CAUTIONS MERPATI OVER CHINESE PLANE PROCUREMENT PLAN

Jakarta, Jan 16 (ANTARA) - State Enteprises Minister Sofyan Djalil called on PT Merpati airlines here on Friday to exercise prudence with regard to its plan to procure 15 MA-60 aircraft from China.
He said the company had to adjust its purchase plan to its financial capability.
"In essence, the purchase must be done fully upon business and goodwill considerations and it must not cause the company eventually to become a losing airline again," Djalil said at his office.
Merpati and China's Xian Aircraft Industry Co. Ltd. (XAC) on June 7, 2006 signed a purchase contract for 15 aircraft, two of which already arrived here on September 6, 2006.
The delivery of the other 13 planes however had been delayed suspectably because the planes failed to meet the required specifications and their price also was considered too high.
Sofyan said the government had set up a restructuring team and along with officials from the Finance Ministry, his office and the National Development Planning Board to renegotiate the deal with Xian Aircraft Industry Co. Ltd.
"The first renegotiation meeting was held at the end of last year in China while early this year the Chinese side will come to Indonesia for the same purpose," he said.
He said his office which was responsible to Merpati shareholders hoped the renegotiations would be cover three things namely price, guarantee and number.
According to sources, the planes' prices had been one of the main factors hindering a purchase deal that led to its reviewing.
The US$15 million price tag for each plane was considered too high compared to US$11 million quoted by aircraft makers in other countries.
"Besides a reasonable price we also want a guarantee that the planes can still function after being used for a period of tens of years.
In terms of the total number of planes to be purchased, the minister suggested that Merpati adjust it to its operational capacity.
"It should not happen that the planes are finally unoperable because of limited airport capacity," he said.
***2***