Govt urged to go ahead with AriaWest takeover

Govt urged to go ahead with AriaWest takeover

JAKARTA (JP): The House of Representatives urged the
government to go ahead with its plan to temporarily take over the
telecommunications operations of PT AriaWest International in
West Java and Banten, despite objections from the company.

A senior government official, however, warned the Ministry of
Communications against going ahead with the plan, saying the move
could cause an international outcry.

The House's Commission IV for infrastructure and
transportation said the ministry should put the plan into effect
as soon as possible and use its own funds to run the operation.

"The government should use its own funds, so that it is clear
that it is the government that is taking over the operation,"
vice chairman of House Commission IV Rosyid Hidayat told The
Jakarta Post, referring to one of the conclusions arrived at
after the Commission's meeting with AriaWest and its joint
operations (KSO) partner PT Telkom.

The government plan to take over AriaWest's operation follows
on from a protracted dispute between the company and state-owned
telecommunications provider Telkom, which has reportedly lead to
disruptions in telecommunications services in parts of Banten and
West Java.

Telkom's employees in both provinces, who are managed by
AriaWest under the KSO contract, have yet to receive their June
salaries because of the dispute.

The dispute centers on the valuation of the assets owned by
the KSO, which Telkom wants to buy out.

The Ministry of Communications said last week it would set up
an independent team to temporarily take over AriaWest's
operations in both provinces.

AriaWest rejected the plan outright, calling it an
"expropriation" of its rights.

The company's chief financial officer, Stephen Dowling, said
if the government carried out its plan, the company would take
the matter to international arbitration.

He warned that international agencies such as the World Bank
and insurance firms would take legal action against the
government of Indonesia.

AriaWest has already filed arbitration proceedings against
Telkom on charges of breaching their KSO contract.

Assistant to the Coordinating Minister for the Economy Dipo
Alam, who also attended the meeting, warned of the international
pressure if the government realized its plan.

"The takeover would only be justified if the House asked the
government to do so. But there are risks the government will have
to face," said Dipo, who had been officially assigned by the
government to mediate in the Telkom-AriaWest dispute.

Dipo stressed that if the government went ahead with its plan,
the independent team should use government funding to run the
operation.

"Otherwise, we would risk being accused of using illegal
funds, and so forth," Dipo added.

Legislator Enggartiasno Lukita, however, dismissed the threats
saying that the Indonesian government would appeal to foreign
embassies for support.

"Besides, the majority shareholder in the company is local
anyway. They (the foreign stakeholders) only hold a minority
share here," he said on the sidelines of the hearing with the
House.

Enggar was optimistic that once the government took over
AriaWest's operations, the company would be more rational in its
valuation of the operations.

AriaWest is 52.5 percent owned by PT Artimas Kencana Murni, 35
percent by U.S.-based MediaOne International B.V., of which telco
giant AT&T is a part, and 12.5 percent owned by Hong Kong's Asian
Infrastructure Fund. (tnt)