The government is desperately trying to get the long-delayed $700 million Palapa Ring telecommunications project back on track after PT Excelcomindo Pratama pulled out of the project consortium on Monday.<\/p>\n
Officials worry that the latest hitch could deal another costly blow to the struggling project, which is supposed to provide nationwide Internet access at internationally competitive speeds.<\/p>\n
\u201cThe government now is trying to find several solutions to help the rest of the consortium members keep the project afloat,\u201d Communication and Information Technology Ministry spokesman Gatot S. Dewabroto told the Jakarta Globe on Tuesday.<\/p>\n
\u201cOne of the solutions would be to use [government] funds \u2026 including those from the Universal Service Obligation program and funds that the government gets from fining errant telecommunications providers.\u201d<\/p>\n
\u201cHowever,\u201d Gatot added, \u201cwe can\u2019t determine how much money the consortium will need until we meet with them again early next month.\u201d<\/p>\n
With Excel withdrawing from the project, further delays seem very likely.<\/p>\n
In July 2007, seven Indonesian telecommunications operators agreed to collaborate on the project, but planning stalled after one firm pulled out in 2007 and two more withdrew in August and September of last year.<\/p>\n
At the time, the companies said that they had quit because of the large amount of investment required and the great length of time before returns would be realized.<\/p>\n
The government then set December 2008 as the next start-up date for the project, but the consortium said it was not ready and the work was delayed again.<\/p>\n
Hasnul Suhaimi, president director of Excel, said that the company\u2019s poor financial performance was the main reason it was pulling out of the Palapa Ring project.<\/p>\n
\u201cWe cannot participate in the project this year \u2026 because we suffered Rp 15 billion [$1.5 million] in losses last year, and in the first quarter of 2009 we also lost about Rp 305 billion,\u201d Hasnul said.<\/p>\n
However, he added, the company had already asked the government to adjust the terms of its contract so it could re-join the consortium if its financial situation improved.<\/p>\n
\u201cWe understand Excelcomindo\u2019s decision in light of the global economic downturn,\u201d Gatot said of the move. \u201cHowever, we\u2019re also a bit disappointed.\u201d<\/p>\n
The remaining consortium members are PT Telekomunikasi Indonesia, the country\u2019s largest telecommunications company, with a $90 million investment; PT Indosat, the nation\u2019s second-biggest cellular provider, with $30 million; and PT Bakrie Telecom, also with $30 million.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-scrambles-to-fill-excels-palapa-ring-gap-1243399607", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }