Aria West to invest $180m in West Java

JAKARTA (JP): Telecommunications firm PT Aria West International said on Friday that it planned to invest US$180 million in its concession area in West Java once it reached agreement with state-owned telecommunications company PT Telkom.

Aria West chief financial officer Stephen R. Dowling said 40 percent of the planned investment fund would come from the company's shareholders, with the rest sourced from bank loans.

Dowling said the company needed to negotiate with PT Telkom on the arrangement of the joint-operating scheme (KSO) as the current agreement expired by year-end.

Dowling said his company was ready to return to its master contract with Telkom but it needed to clarify certain clauses in the new agreement.

"What we need now is time to settle the different interpretations on unclear clauses. Aria West will negotiate again with PT Telkom, starting Jan. 17," Dowling said.

Telkom and its five partners, including Aria West, signed a master agreement in 1996 to allow the partners to install telephone lines in five regions in Indonesia. The agreement ends in 2010.

After the economic crisis hit the country in 1997, the two camps signed a two-year memorandum of understanding in which Telkom agreed to cut its share of revenue from the projects to 10 percent from 30 percent.

Memorandum

The memorandum of understanding will end this year. Telkom earlier said it wanted its share of revenue to return to 30 percent after the memorandum of understanding lapsed.

Telkom announced earlier that it had reached agreement with four of its five partners to ratify their KSO schemes. It further said that it had yet to reach agreement with Aria West.

The four partners which have reached agreement with Telkom are PT Bukaka Singtel International with concession areas in Sulawesi and other areas of eastern Indonesia; PT Mitra Global Telekomunikasi Indonesia with concession areas in Central Java; PT Cable and Wireless Mitratel in Kalimantan and PT Pramindo Ikat Nusantara in Sumatra.

Telkom vice president of communications D. Amarudien said negotiations with Aria West were put on hold and would resume on Jan. 17 because the latter's president John Vondras took a year- end vacation.

Dowling countered that the delay was because his company started negotiations with Telkom only on Dec. 15, while the other KSO partners started negotiations as far back as Nov. 2.

"Nevertheless, I'm optimistic that by mid February we will be able to reach agreement on the needed amendments (of the master contract)," Dowling said. (43)