Mitra Global to invest $724m in Central Java<\/p>\n
JAKARTA (JP): PT Mitra Global Telekomunikasi Indonesia, a
\nconsortium which this week won a contract to install 400,000
\ntelephone lines in Central Java, plans to invest A$1 billion
\n(US$724 million) in the next three to four years in the project.<\/p>\n
However, the consortium will start collecting revenues early
\nnext year as soon as it takes over the management of the existing
\ntelecommunications facilities in the province from PT
\nTelekomunikasi Indonesia (Telkom), the state-owned domestic
\ntelecommunications company, Ross Abbott, general manager for
\nIndonesia of Telstra Corp. of Australia, told The Jakarta Post
\nTuesday evening.<\/p>\n
Telstra is a member of the consortium, which also includes PT
\nIndosat, Nippon Telegraph & Telephone of Japan and PT Widya Duta
\nInformindo, a local consultancy and contracting company.<\/p>\n
Abbott said that under the contract, the consortium will
\nconstruct new lines and modernize the existing system.<\/p>\n
An industrial executive said that starting on Jan. 1 next
\nyear, the consortium would begin network construction, management
\nof Telkom staff and collection of revenues from the operation of
\nthe existing system.<\/p>\n
The consortium is among the four awarded contracts to build a
\ntotal of 1.64 million telephone lines in Kalimantan, Central
\nJava, Sumatra and West Java.<\/p>\n
Based on the contracts, Telkom will receive an estimated total
\nrevenue of Rp 13.98 trillion (US$6.2 billion) from initial
\ninvestor payments, guaranteed annual minimum revenues and a
\npercentage of the distributable operation revenues throughout the
\noperational period of 15 years.<\/p>\n
Revenues<\/p>\n
Abbott said that revenues were expected to flow in by early
\n1996 and would be shared with Telkom.<\/p>\n
However, he said, his consortium had yet to negotiate with
\nTelkom on the details of the contract specifications.<\/p>\n
Abbott explained that the consortium would manage the existing
\nsystem in Central Java, currently consisting of about 400,000
\nlines, \"to bring it to world standard\", besides the planned
\nnetwork.<\/p>\n
The contract will involve the introduction of new systems and
\ntraining of Telkom's staff -- consisting of some 3,500 personnel
\n-- over the 15-year contract period.<\/p>\n
He said that Telstra, which has a 20 percent stake in the
\nconsortium, plans to station a team of up to 35 experts in
\nIndonesia in the next three years to establish the business and
\nto train local Telkom professionals.<\/p>\n
The industrial executive said that over the 15 years of
\ncooperation with Telkom, the consortium will guarantee Telkom a
\nminimum net revenue equivalent to the amount that Telkom would
\nreceive if it managed the existing lines.<\/p>\n
If the revenue exceeds this amount, the executive said, the
\nadditional revenue would be shared between the two parties, with
\nthe consortium receiving 70 percent and Telkom the remaining 30
\npercent.<\/p>\n
The executive said that by the end of the contract period,
\nTelkom was estimated to be able to reap Rp 900 billion.(pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mitra-global-to-invest-724m-in-central-java-1447893297",
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"sponsor": "Okusi Associates",
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