Foreign firms agree resumption of water deal

Foreign firms agree resumption of water deal

LONDON (Agencies): Britain's Thames Water Plc said yesterday
it had signed an agreement with the Indonesian authorities to
resume operational and administrative control of water supplies
in eastern Jakarta over the next few days.

The company, which had the contract suspended last week after
an alleged dispute about awarding of the project, said its
partner PT Kekarpola Airindo, which had a 20 percent stake, would
leave the joint venture and Jakarta authorities were expected to
take a small shareholding.

Thames also said it had agreed with Indonesian authorities to
resume operational control of water supplies to eastern Jakarta
without its 20 percent partner PT Kekarpola Airindo after the
contract was suspended last week following a dispute over its
award.

Thames, which provides water services to London, also said it
was adding 100 million pounds in investment domestically over the
next two years to improve services and environmental standards.

"The utility business is providing its highest ever quality
and service standards whilst maintaining the lowest average bill
in the country," chairman Robert Clarke said in a statement.

Indonesia had canceled tap water deals with Kati, the Thames
joint venture, and another involving French conglomerate Suez
Lyonnaise des Eaux last month.

The cancellation of the deals to supply water to Jakarta
customers was taken on the grounds that the awarding of the
project stank of corruption and nepotism.

PT Kekarpola Thames Airindo, owned by former president
Soeharto's eldest son Sigit Hardjojudanto in cooperation with a
subsidiary of Thames, was given the license to operate in the
eastern part of the city.

Meanwhile, Suez Lyonnaise des Eaux also said in Paris
yesterday it has acquired 60 percent of the Indonesian company PT
Garuda Dipta Semesta (GDS), a subsidiary of the Salim Group, that
it doesn't already own.

Suez Lyonnais acquired the stake from the Salim Group, one of
the country's biggest companies, which has close ties to the
family of Soeharto whose business dealings are now under scrutiny
by the Indonesian government.

"Following negotiations with the Indonesian government, Suez
Lyonnaise des Eaux has just signed an agreement through which its
position with regard PT GDS is confirmed as far as carrying out
its water contract in West Jakarta is concerned," Suez Lyonnais
said in a statement.

Suez Lyonnaise holds a 25-year contract to supply and
distribute water in the western half of Jakarta that went into
effect in February.