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.