In­done­sia ey­ing ‘9 or 10’ Sukhoi Su-35 jets De­fense spend­ing jumped 77%

Kuwait Times - - INTERNATIONAL -

In­done­sia is in talks to buy “nine or 10” Sukhoi Su-35 fighter jets from Rus­sia, an In­done­sian de­fense min­istry of­fi­cial said yes­ter­day, with­out giv­ing a time­line for any deal. “We are still ne­go­ti­at­ing,” Leonardi, head of the de­fense fa­cil­i­ties at In­done­sia’s de­fense min­istry who goes by one name, said by tele­phone. “We are still bar­gain­ing, ‘how much do you want to sell them for?’.” In­done­sian de­fense min­is­ter Ryamizard Ry­acudu said in May the South­east Asian coun­try would buy eight Rus­sian Sukhoi Su-35 jets this year, but the planned purchase has not ma­te­ri­al­ized. Ri­val Western com­pa­nies are still try­ing to wrest the deal to sup­ply In­done­sia with fighter jets away from Rus­sia’s Sukhoi, two peo­ple fa­mil­iar with the talks said, ask­ing not to be named be­cause of the sen­si­tiv­ity of the mat­ter.

The award has not been fi­nal­ized and it is seen as a test for ef­forts by In­done­sian Pres­i­dent Joko Wi­dodo to en­force more trans­parency in big-ticket deals, they said. Hun­dreds of com­pa­nies in­clud­ing Lock­heed Mar­tin of the United States, Swe­den’s Saab and In­done­sian state weapons maker PT Pin­dad will be rep­re­sented at an Indo De­fense ex­hi­bi­tion, which will be held in Jakarta from Nov 2 to Nov 5. The coun­try’s big­gest an­nual de­fense show will come weeks af­ter In­done­sian war­planes staged largescale ex­er­cises on the edge of a South China Sea area claimed by Bei­jing.

While In­done­sia is not part of the dis­pute over the South China Sea, it ob­jects to China’s in­clu­sion of waters around the Natuna Is­lands within its ‘nine-dash line’, a de­mar­ca­tion line used by China to show its claims there. In­done­sia’s to­tal de­fense spend­ing has risen 77 per­cent over the last four years to 108.7 tril­lion ru­piah ($8.3 bil­lion), though it is ex­pected to dip to 108.0 tril­lion ru­piah next year, ac­cord­ing to of­fi­cial data. In­done­sia had signed a con­tract with Lock­heed Mar­tin for 24 F-16 jets, of which 14 had been de­liv­ered and 10 more ex­pected by early 2018, the de­fense min­istry’s Leonardi said. He de­clined to dis­close the value of the deal.

Re­search firm IHS Markit pre­dicts that In­done­sia will spend more than $20 bil­lion on pro­cure­ment be­tween 2016 and 2025 - the fifth fastest-grow­ing de­fense bud­get in the world-and it will in­creas­ingly seek to di­ver­sify its sup­pli­ers.

South Korea, Rus­sia and France are ex­pected to hold a com­bined mar­ket share of 53 per­cent be­tween 2009 and 2018, while the other half will be shared by about 30 coun­tries, many with less than one per­cent, IHS said. “This re­flects In­done­sia’s wari­ness about de­pen­dency of a sup­plier or a set of sup­pli­ers, as well as the in­ten­tion to ‘shop around’ for the best de­fense deals, spurring com­pe­ti­tion,” said IHS an­a­lyst Jon Gre­vatt.— Reuters

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