Dutch firm seeks payoff from Manado government
Jongker Rumthe, The Jakarta Post/Manado
A Dutch company is demanding that the Manado municipal administration of North Sulawesi province pay Rp 30 billion (US$3.3 million) in compensation over last week's cancellation of a tap water agreement.
The Manado mayor had signed in February a cooperation agreement with Waterleiding Maatschapij Drenthe (WMD), which was canceled last Friday after the city's tap water firm PDAM refused to endorse it.
WMD president director Kaarst Hoogsteen said the compensation demanded was half the amount of funds the firm had disbursed toward a joint analysis and other costs for the tap water project.
He said he would soon submit an official demand to the Manado administration and Manado Council ahead of taking the case to court.
"Both parties should be held mutually responsible for the Rp 60 billion that had been disbursed by the WMD during survey and exploration procedures.
"And because of that, we request the municipal administration to return Rp 30 billion to us," Hoogsteen, accompanied by Indonesian Ambassador to the Netherlands Mohammad Yusuf, told a press conference in Manado on Friday night.
Hoogsteen said the demand was in line with international business standards that if a joint agreement was canceled, funds that had been disbursed for survey and exploration should be accounted for by both parties.
Hoogsteen lamented the cancellation of the agreement due to PDAM's refusal to sign it.
The Manado mayor had signed the joint agreement on Feb. 16, but Hoogsteen questioned why PDAM, which falls under the auspices of the municipal administration, refused to endorse it.
Last-ditch negotiations were conducted on Friday morning between the WMD and the Manado administration, but was fruitless. In the afternoon, PDAM met again with WMD representatives at the city's Ritzy Hotel, during which the two parties agreed to terminate the cooperation.
PDAM Manado managing director Theo Nangoy said the agreement was canceled because of several as-yet unsettled legal requirements.
Meanwhile, head of PDAM supervisory board Tommy Sumakud said the company refused to sign the agreement because the WMD had not agreed to several conditions, including Law No. 22 on regional autonomy.
A presidential decree states that projects of at least Rp 50 billion must go through an open tender, he added.
Tommy did not say if the canceled WMD project was offered through a public tender, while he denied that the joint agreement contained requirements for arranging fund transfers.
Moreover, he said, no documentation or other proof existed to show whether the funds had been disbursed to PDAM Manado, as the WMD also had joint projects with several other regions.
Tommy added that funding problems were an assumed risk in any business.