Government forms team to handle Telkom-Ariawest dispute<\/p>\n
JAKARTA (JP): The government said on Monday it would form an
\ninter-ministerial team to facilitate talks to end the dispute
\nbetween state telecommunication company PT Telkom Indonesia, and
\nPT Ariawest International.<\/p>\n
\"I have reported to Coordinating Minister for the Economy on
\nthe establishment of a team that will facilitate a solution to
\nTelkom and AWI's (Ariawest) problem,\" Minister of Transportation
\nand Telecommunication Agum Gumelar was quoted as saying by
\nAntara.<\/p>\n
He said the team would comprise officials from his ministry,
\nthe Ministry of Finance, and from the office of Coordinating
\nMinister for the Economy, Rizal Ramli,<\/p>\n
\"In a short time, the coordinating minister will make a
\ndecision,\" he said without elaborating further.<\/p>\n
Telkom's dispute with Ariawest centers around the compensation
\namount Telkom must pay to end a partnership agreement between
\nthem.<\/p>\n
Ariawest, a unit of the United States' telecommunication giant
\nAT&T, operates fixed telephone lines in West Java under a joint
\noperation scheme called KSO with Telkom.<\/p>\n
The scheme, initiated in the mid-nineties, requires Telkom's
\nKSO partners to invest in new fixed lines, and operate them under
\na profit-sharing scheme.<\/p>\n
But as the government has since required Telkom to lose its
\nmonopoly right in the fixed line industry, the KSO scheme has
\nbecome financially unattractive.<\/p>\n
Telkom agreed to bail out the investment its five KSO partners
\nmade in order to end the KSO scheme.<\/p>\n
So far, Telkom has secured bail-out deals for two KSO
\npartners.<\/p>\n
But despite lengthy negotiations, the state company was unable
\nto come to an agreement with Ariawest.<\/p>\n
Agum said Ariawest demanded Telkom pay it US$700 million in
\ncompensation, while the latter insisted on paying only $300
\nmillion.<\/p>\n
He said that the team would work out how to settle the
\ndifference in valuation of Ariawest's investment.<\/p>\n
But with no immediate solution in sight, Ariawest has said it
\nwas planning to commence arbitration proceedings against Telkom
\nto recoup its investment.<\/p>\n
Ariawest also charged Telkom of failing to build extra phone
\nlines in West Java, as required under the KSO contract.<\/p>\n
Telkom's inaction, prompted Ariawest to retain the
\ndisbursement of Rp340 billion (about $31.4 million) in revenue
\nshares to Telkom.<\/p>\n
Ariawest further complained of staff harassment at its Bandung
\noffice by Telkom employees, and even of death threats issued
\nagainst some of its staff members.<\/p>\n
Ariawest said last week that grave security concerns had
\nforced it to evacuate its staff from Bandung.<\/p>\n
\"We cannot take risks with the safety of our personnel,\" the
\ncompany's president John Vondras said in a statement last week.<\/p>\n
Telkom has denied all charges against it.<\/p>\n
The state company said it was prepared to face Ariawest in
\nfront of an arbitration panel, for which it had already appointed
\na team of lawyers.<\/p>\n
Commenting on the accusations of death threats, Telkom's
\ninvestor relation's officer Dina Arifani described them as
\n\"exaggerated and groundless\".<\/p>\n
Telkom's protracted dispute with Ariawest sheds more negative
\npublicity on Indonesia's already tarnished image among foreign
\ninvestors.<\/p>\n
Its four other KSO partners are PT Mitra Global Telekomunikasi
\nIndonesia, PT Pramindo Ikat, PT Cable & Wireless Mitratel, PT
\nBukaka Singtel.(bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-forms-team-to-handle-telkom-ariawest-dispute-1447893297",
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"sponsor": "Okusi Associates",
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