GDS denies PDAM's accusations on water accord

GDS denies PDAM's accusations on water accord

JAKARTA (JP): French firm Lyonnaise des Eaux, one of city-
owned water company PDAM Jaya's two partners in a water supply
management accord, denied yesterday PDAM allegations that it fled
the country and neglected its obligations.

The company's executive, Christian Michelon, also disclaimed
some media reports that PDAM terminated its agreement with
Lyonnaise's local associate PT Garuda Dipta Semesta (GDS) and the
other partner, PT Kekar Thames Airindo (Kati) with its British
associate Thames Water International.

"We hope that everybody understands that we did not flee the
country even though, unfortunately, expatriates were asked by
their embassies to temporarily leave Indonesia during the
unrest," he said.

"But our Indonesian partners were in-charge during our absence
and continued with their regular activities."

Michelon told The Jakarta Post yesterday that Lyonnaise's 15
expatriate employees flew from Jakarta to Singapore on May 19 and
returned on May 23.

"We had maintained our work and cooperation with our
Indonesian counterparts by phone from Singapore during the two
working days we were away," he said.

Local media reported that PDAM's director Rama Boedi announced
Saturday the company had canceled and taken over the water supply
management and operational activities previously handled by GDS
and Kati on the grounds that corruption, collusion and nepotism
had played a part in the awarding of the project.

The decision was made because GDS and Kati, partly owned
respectively by the Salim group and former president Soeharto's
eldest son Sigit Hardjojudanto, failed to improve the services
after they raised the water tariffs in April, he said.

Rama -- who used Gubernatorial Decree No. 13 dated May 22,
1998 as the legal basis for his decision -- also demanded GDS and
Kati hand over about Rp 90 billion in income they had collected
from customers.

Michelon said the company had not kept the money.

"All money collected from the customers was deposited at ABN-
Amro in an Escrow account to which we did not have direct
access."

He said the money collected from February to April had been
distributed each month to the concerned parties.

Michelon said Lyonnaise was now seeking legal advice over the
allegations.

"But we are not going to sue the Jakarta administration or
PDAM over these (allegations)," he said. "We want to clarify the
matter with PDAM instead.

"We also invite the administration to appoint an independent
audit team to review GDS' customer billing accounts."

Michelon said PDAM's takeover of GDS' water supply and
management operation activities was only a temporary measure.

"We did not receive any notice of termination. Therefore, we
think it was only a temporary measure. We hope that they will
bring the contract back to normal very soon."

Separately, Deputy Governor for Economic Affairs Harun Al
Rasyid emphasized yesterday that his office had not terminated
PDAM's cooperation agreement with its private partners.

Harun emphasized that Sutiyoso's letter, or instruction, which
was used as PDAM's legal basis in its Saturday's takeover, was
intended to urge PDAM to review its cooperation with the private
partners.

"It only said that, if necessary, PDAM may take control of
operational and management activities from GDS and Kati in a bid
to maintain a good service for its customers," he said.

At PDAM's headquarters in Bendungan Hilir yesterday, some
4,000 employees, including company director Rama Boedi, voiced
their concerns about cooperating with GDS and Kati because the
latter won the contract due to a "special recommendation" from
the central government.

Rama vowed that he was ready to be investigated by city
administration officials and would accept the consequences if the
administration later found any mistake had been made by PDAM in
its cooperation agreement.

PDAM will announce a cut in tap water tariffs next week after
the governor's decree on the matter is prepared, he said.
(ind/cst)