Govt urged to heed Telkom-AriaWest row
Govt urged to heed Telkom-AriaWest row
JAKARTA (JP): The government should pay greater attention to
the lingering dispute between state PT Telkom and PT AriaWest
International, as it could impact on Indonesia's position in the
international forum, a senior government official said.
Director general for posts and telecommunications at the
Ministry of Communications Djamhari Sirat said on Tuesday that
the dispute between the two companies had become so complex and
sensitive that the matter ought to be discussed by the Cabinet.
"If we take the wrong steps, what was once a dispute between
AriaWest and Telkom could easily turn into a dispute with the
government of Indonesia," he told reporters on the sidelines of a
seminar here.
Djamhari made the statement following a move on Monday by
Telkom to terminate its joint operation (KSO) contract with the
subsidiary of the American telecoms giant AT&T.
Telkom said it had decided to unilaterally terminate the
contract because it thought AriaWest had failed to honor it.
It remained unclear if the government was involved in the
process leading to Telkom's decision to terminate the contract,
but Djamhari said the termination was purely a corporate action
by Telkom.
"What Telkom did was purely a corporate action, and it has its
own consequences from a business point of view," Djamhari said.
Djamhari said Minister of Communications Budi Mulyawan Suyitno
had been informed of the contract termination and promised to
take the case to the Cabinet for discussion.
Djamhari stressed that the government was still poised to
temporarily take over AriaWest's telecommunications operations in
West Java and Banten, despite Telkom's move to terminate the
contract.
"But first we shall see whether AriaWest will accept (the
contract termination) or not (before making a concrete move)," he
said, explaining that if AriaWest agreed with the contract
termination, then the government would return telecoms services
in the two provinces to Telkom.
In a related development, AriaWest lawyer Andrew I.Sriro said
on Tuesday that the unilateral termination of the KSO was a very
costly error on the part of Telkom
"The illegal move would simply strengthen our arbitration
claim against Telkom which we filed with the headoffice of the
International Chamber of Commerce in Paris in May," Sriro
asserted.
Sriro said his company had tried hard to negotiate in good
faith with Telkom but no any progress had so far been made.
According to the joint operation (KSO) contract signed in
October, 1995, AriaWest was given the right to build, operate and
manage telecommunications services in West Java and Banten for a
period of 15 years.
Disputes between Telkom and AriaWest arose especially after
the economic crisis hit Indonesia in 1997 and the melting of the
rupiah upset many basic assumptions for investments under the KSO
operations.
The dispute has resulted in the decline of telecoms services
in West Java and AriaWest's inability to pay salaries for
Telkom's employees after Telkom withheld funds from telephone
subscribers from AriaWest.
The government, with the support of the House of
Representatives, had agreed to temporarily take over the day-to-
day operations of AriaWest in West Java to ensure the continuance
of telecommunications services in the two provinces.
In a bid to end the protracted dispute, Telkom terminated the
contract on Monday and agreed to pay AriaWest compensation based
on the net book value of its assets.
AriaWest is 52.5 percent owned by Indonesia's PT Artimas
Kencana Murni, 35 percent by the U.S.' MediaOne International BV,
of which AT&T is a part, and 12.5 percent by Hong Kong's Asian
Infrastructure Fund. (tnt)