Aria West to invest $180m in West Java
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)