AriaWest warns govt over plan to set up team

JAKARTA (JP): Joint cooperation (KSO) partner of state-owned PT Telkom, PT AriaWest International, said it rejected the government's plan to assign an independent team to temporarily take over its telecommunications operations in West Java and Banten.

AriaWest's Chief Financial Officer Stephen R. Dowling warned on Wednesday that the company would file an arbitration proceeding against the government if it went ahead with its plan.

"We've told the government on many occasions to be very careful about what they do here," he told reporters.

Dowling labeled the plan as an "expropriation" of its right, warning that international agencies such as the World Bank and insurance firms would take legal action against the government of Indonesia.

The Ministry of Communications announced last week that it will install an independent team to temporarily handle the day-to-day operations of AriaWest, due to the prolonged conflict between the company and Telkom.

The conflict, which is mainly focused on the valuation price for AriaWest's assets and operations which Telkom intended to buy, has reportedly disturbed telecommunication services in both provinces. Telkom's 5000 employees in the region, who are managed by AriaWest under the KSO contract, failed to receive their June salary on time.

AriaWest had sent a letter to Minister of Communications Budhi Mulyawan Suyitno, asking the reasons behind the plan to establish the independent management team, Dowling said, but, he added the minister had yet to give a response.

Dowling asserted that the problem with the West Java and Banten telecommunications regions did not lie with its management, but were due to Telkom's withholding of operational funds collected from customers.

AriaWest only has Rp 300 million (about US$26,548) left in the KSO account at ABN Amro Bank which is not enough to cover one day's operation, he said, adding that at least Rp 265 billion had been collected from subscribers in the provinces, which were being held in Telkom's accounts at several local banks.

The banks include Bank BNI, Bank Mandiri, Bank BRI, and Bank Bukopin, Dowling said.

"The problem is ... who's got the cash, who has control of the wallet here. And who's got the wallet here is PT Telkom and they're refusing to transfer the money," Dowling charged.

Dowling explained that under the existing payment system, customers pay their phone bills at Telkom-appointed banks, which put the money in Telkom accounts. Telkom then transfers the money to the KSO account.

AriaWest had also filed an arbitration suit against Telkom in May with the International Chamber of Commerce (ICC). It demanded $1.3 billion for losses incurred by Telkom's breaches of the KSO contract agreement.

Meanwhile, Telkom's director of operations Komarudin Sastrakoesoemah denied that Telkom was withholding any phone fees collected from customers.

He said the transfer of money from Telkom to the KSO account went smoothly up until last October.(tnt)