Telkom says it is not daunted by AriaWest arbitration threat<\/p>\n
JAKARTA (JP): State-owned telecommunications company PT
\nTelekomunikasi Indonesia (Telkom) said on Friday it is ready to
\nface arbitration proceedings by PT AriaWest International, one of
\nits five partners in a joint operation scheme.<\/p>\n
Dina Arifani, the company's investor relations officer, said
\nthat AriaWest's threat to commence arbitration proceedings was
\nnot the first and that Telkom had formed a team of lawyers to
\nfight against the arbitration threat.<\/p>\n
\"We're ready to face it (the arbitration). But, it's a last
\nditch effort to resolve the conflict. We still prefer to settle
\nthe dispute through negotiations,\" Dina told The Jakarta Post.<\/p>\n
AriaWest threatened on Thursday to commence arbitration
\nproceedings in Geneva to recover US$1.3 billion from Telkom as
\nlong-standing efforts to amicably resolve their differences had
\nproved futile.<\/p>\n
\"It has become clear that Telkom doesn't want to settle the
\ndispute. So, unfortunately, there seems to be no alternative but
\nto put the case before an independent arbitrator in Geneva,\" the
\ncompany's chief financial officer Stephen Dowling said on
\nThursday.<\/p>\n
AriaWest also said that its staff had received death threats
\nand that its Bandung office had been terrorized by menacing
\nbanners and posters under the auspices of Sekar, an organization
\nof Telkom employees.<\/p>\n
Later on Friday AriaWest said it was evacuating all of its
\nstaff from its Bandung office due to grave security concerns.<\/p>\n
\"We cannot take risks with the safety of our personnel,\" the
\ncompany's president John Vondras said in a statement.<\/p>\n
AriaWest, which is partly owned by a unit of the United
\nStates-based telecommunication giant AT&T, operates fixed
\ntelephone lines in West Java under a joint operation scheme or
\nKSO with Telkom.<\/p>\n
Dina denied that Telkom had terrorized or threatened AriaWest
\nexecutives and staff.<\/p>\n
\"It doesn't make sense that Telkom would use such uncivilized
\nand unethical methods,\" Dina said, adding that AriaWest's
\nallegations were exaggerated and groundless.<\/p>\n
Ariawest and Telkom have been at odds over several issues
\nrelated to their contract, including the amount of money paid by
\nAriawest to Telkom under the KSO contract. AriaWest accused
\nTelkom of not meeting their obligation to build extra phone lines
\nas pledged in the contract.<\/p>\n
The two companies have been engaged in negotiations to settle
\ntheir dispute. AriaWest wants Telkom to bailout its operation but
\nthe two companies are divided over how much Telkom should pay in
\ncompensation to end the contract.<\/p>\n
According to AriaWest it should be paid at least $1.3 billion
\nwhile Telkom says that the payment is worth only $160 million.<\/p>\n
AriaWest said early this week that it had decided not to
\ndisburse Rp 340 billion in revenue shares to Telkom because the
\nlater failed to meet its obligation to build extra phone lines.<\/p>\n
Dina also said that AriaWest's decision to withhold the funds
\nreflected AriaWest's lack of good faith to settle the
\ndispute. (03)<\/p>",
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