E. Java govt may ax Tommy's projects

JAKARTA (JP): The East Java provincial administration looks set to terminate the contract with a company partly owned by a son of former president Soeharto to develop a drinking water plant in Umbulan due its failure to complete the project.

The head of the provincial economic affairs office, Tari Sugiono, said in Surabaya yesterday that PT Mandala Citra Umbulan should have realized the project this month under the terms of the contract with the East Java administration signed in 1994.

But, thus far there were no signs that the company was going to finish the project by the deadline.

"If the company does not realize the project this month, we shall terminate the contract. There are still a lot of bona fide investors who are interested in the project," Tari was quoted by Antara as saying.

Mandala Citra is jointly owned by the Humpuss Group controlled by Soeharto's youngest son Hutomo Mandala Putra, also known as Tommy, and the Ciputra group, controlled by property tycoon Ciputra.

Under the contract, the consortium was to develop the US$250 million project under a 25-year build, operate and transfer deal.

The water plant will take water from the Umbulan water spring, along the slopes of Mount Bromo, 55 kilometers south of the provincial capital of Surabaya.

It is designed to carry 4,200 liters of water per second, 2,400 liters of which will be distributed to Surabaya, 1,350 liters to Sidoarjo regency, 250 liters to Pasuruan regency and 200 liters to Gresik regency.

Mandala Citra won the contract four years ago in bidding which reportedly also involved Tommy's brother Bambang Trihatmodjo, sister Siti Hardijanti Rukmana and a number of foreign investors.

Tari also said the East Java administration would also terminate the contract with PT Sarana Sirkuitindo Utama, owned by Tommy and fellow auto racer Tinton Suprapto, to install computerized facilities for vehicle roadworthiness tests in the province, due to its failure to realize the project on schedule.

Tari said that under the contract signed four years ago the company should have finished installing the facilities last week but thus far the firm had done nothing.

"Formerly, we could do nothing but make complaints. Now in the era of reform, no one is afraid (of Tommy)," he said. (jsk)