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Delay in delivery of Brazilian aircraft irks Indonesia

Publication Date : 29-04-2014

 

The Defence Ministry of Indonesia has expressed its disappointment with Brazilian aerospace conglomerate Embraer SA for the seven-month delay in the delivery of four EMB 314 Super Tucano turboprop aircraft that the country had ordered.

The ministry’s procurement center head, First Marshal Asep Sumaruddin, said on Monday that Embraer was obliged to deliver the first batch of eight aircraft by August last year and the second one in March 2015.

“From the first batch, we’ve only received four aircraft,” said Asep. “We’ve contacted Embraer for clarification about the remaining four, but haven’t received  sufficient response. We’re still coordinating with the Brazilian government through their Defence Ministry and embassy in Jakarta to resolve the problem.”

The ministry signed a US$284-million contract with Embraer in 2010 to build a squadron of Super Tucanos to replace the OV-10 Bronco aircraft, which have been in service since 1976.

The Tucano is designed for light attack, counter insurgency, close air support, aerial reconnaissance missions in low threat environments, as well as providing pilot training.

Under the contract, Embraer has been required to pay a penalty of 0.1 per cent on a daily basis since the delay, but the combined penalty is capped at a maximum of 5 per cent.

Embraer, according to Asep, has paid the maximum penalty of around $7 million and cannot be issued with more fines, regardless of the length of the delay.

Brazilian Ambassador to Indonesia Paulo Alberto da Silveira Soares said his government would try its best to see that Indonesia receives the four remaining Tucanos “as soon as possible”.

Soares added that the embassy had communicated directly with Embraer to settle the issue.

“Next month, Indonesian Deputy Defence Minister Sjafrie Sjamsoeddin will visit Brazil to discuss defence cooperation. During the visit, he is also scheduled to meet with the president of Embraer. Let’s hope that meeting will clarify everything,” Soares told The Jakarta Post.

Aviation expert Dudi Sudibyo said the delay was worrying as it would set a precedent for another delay in the delivery of the final batch of Tucanos next year.

Dudi blamed the lengthy delay on the lenient penalty stipulated in the procurement contract.

“Five percent is clearly too small for a sanction and the company may be taking advantage of that, particularly when the government has paid almost the entire cost,” Dudi said.

Indonesia has paid 97 per cent of the first batch contract, worth $142 million, according to the ministry.

Dudi suggested that the ministry improve its negotiation skills for subsequent purchases to prevent future delays.

Under the so-called Minimum Essential Force (MEF) strategy, Indonesia is working to purchase 128 jet fighters by 2024, according to the ministry.

“Among them is the Super Tucano, which is technologically superior in its class,” said Dudi.

The four Tucano aircraft delivered last year are now being used by the Indonesian Air Force’s 21st squadron at Abdul Rahman Saleh Air Force Base in Malang, East Java.

 

 

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