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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

PROJECTS

Indonesia's $2-Billion Jet


RESEARCH AND TECHNOLOGY MINISTER B.J. Habibie was more ebullient than usual early this month. Indonesia's domestically developed N-250 commuter plane, he told reporters, was close to breaking even with 219 orders at up to $12 million each. Never mind that Habibie has never given a firm figure about how much was spent on the aircraft, which the World Bank has described as "an expensive toy" that Indonesia cannot afford. And only 24 of the 70-seat short-range N-250 will go to overseas buyers, with Pakistan taking a look-see position on 15 more. Habibie is moving on. He wants Indonesia's IPTN aviation factory to design and manufacture a 130-passenger jetliner codenamed the N-2130.

The minister enjoys the highest backing. In his personal capacity, President Suharto is president-commissioner of new company Dua Satu Tiga Puluh -- Indonesian for the numbers 2130. It will raise $2 billion for a prototype. "This is in the interest of Indonesia's future, especially for transportation," Suharto said March 13 when the firm was formally launched. The plan is to sell shares to Indonesian citizens. Among the 50 or so tycoons who have already bought stakes are timber magnates Muhamad "Bob" Hasan and Prajogo Pangestu, though no one is saying how much they pledged.

Once an executive with German planemaker Messerschmitt, Habibie argues that a far-flung archipelago like Indonesia should not depend on foreigners for its transport needs. He expects the N-2130 to be in service by 2006. Many are skeptical. IPTN may have proved that it can build a turboprop when the N-250 soared beautifully last August, but a jet is a far more complicated machine. And it must be accepted in Indonesia and beyond. As it is, industry sources say the government had to twist arms to persuade local airlines to buy the N-250. But Martin Craigs, president of Swedish maker Saab Aircraft, understands Jakarta's enthusiasm: "Even if we're talking about the crumbs left over from the big guys, [the market for small planes] is still huge" -- especially with debt-ridden Fokker declaring bankruptcy last week.

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