Global Geopolitics Heats Up, Erick Thohir Says Defense BUMN Contracts Rise

SOE Minister Erick Thohir. (Photo: Mery Handayani/VOI)

JAKARTA - The global geopolitical situation is currently heating up, especially the conflict in the Middle East between Israel and Iran.

This situation is said to have an impact on SOEs engaged in the defense sector.

As for Israel-Iran, the geopolitical conflicts that are also still ongoing are Russia with Ukraine and Israel with Palestine.

Minister of State-Owned Enterprises (BUMN) Erick Thohir said, amid the current escalation of global geopolitical conflicts, defense SOEs have the potential to win additional contracts.

The DEFEND ID consists of PT LEN Industri (Persero), PT Dahana, PT Pindad, PT Dirgantara Indonesia, and PT PAL Indonesia.

"Surely DEFEND ID will get an upgrade rather than a work contract. Is that in maintenance? Is that in procurement? Well, the permit, the details must be checked with Mr. Bobby (Managing Director of PT TEN, holding holding DEFEND ID," Erick told the media crew in the Central Jakarta area, written Sunday, April 21.

Erick confirmed that one of the potential additional work contracts for DEFEND ID came from the procurement of main weapons systems (alutsista) from the government.

For example, such as the purchase of two Pattuglitore Polivante d'Altura (PPA) warships Paolo Thaon at the Revel class by the Ministry of Defense (Kemenhan) worth more than IDR 20 trillion.

Erick also explained that the opportunity came because the government was pushing for an increase in the involvement of domestic industries through the level of domestic components (TKDN) in terms of defense, especially in the procurement of defense equipment.

"As long as the budget allocation is as planned, especially with this TKDN policy, if our TKDN policy is big, it's not only one policy," said Erick.

In addition, Erick also revealed, PT LEN has recently signed cooperation with French multinational companies in the fields of aerospace, defense, security and transportation, Thales Group.

The collaboration between PT LEN and Thales Group includes technology transfer, maintenance, and so on.

"I just got the report, right, Thales is a sign agreement with LEN for technology transfer, and also maintenance care, all kinds of things," said Erick.