French firm believes water deal intact

French firm believes water deal intact

PARIS (Reuters): French Suez Lyonnaise des Eaux does not believe a drinking water supply contract in west Jakarta is in danger following the riots and subsequent political shakeout in Indonesia, the company said in a statement.

The group in involved through its 40 percent-owned Garuda Dipta Semesta (GDS) in a contract awarded last year to work on water supplies in the west of Jakarta with the municipal water authority Pam Jaya.

"Under the current conditions, our client Pam Jaya has temporarily altered the way operations are organized by getting involved directly in their management," Suez Lyonnaise said in a statement late on Monday.

"Lyonnaise des Eaux believes that this does not cast doubt on a contract which is not contested by the client," it said.

"This contract was signed in June 1997 and implemented in February 1998 with total respect for the rules of clearness and transparency," it said.

"Lyonnaise des Eaux remains confident in Indonesia and plans to continue its business in the country strictly along the lines of the contract signed and the interests of the Indonesian population concerned," it said.

Among changes since President Soeharto stepped down at the end of last week, Indonesia's state oil company Pertamina has said that it will review contracts with affiliates Perta and Permindo, both Soeharto-linked firms.

And tap water contracts with firms linked to the Soeharto family or allies have been canceled.

Lyonnaise des Eaux, which has now merged with Suez, said a year ago when the contract was signed that the deal covered water management for 25 years and that an investment of $300 million was planned in the first five years.

Turnover from the operation was expected to start off at around $75 million in the first year of operations and rise to around $180 million five years later, the group said at the time.