AriaWest warns govt over plan to set up team

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)