Independent team to take over Ariawest

Independent team to take over Ariawest

JAKARTA (JP): The government will install an independent
management team to temporarily take over the day-to-day
operations of telecommunication services in West Java and Banten
run by PT AriaWest International, a senior official said.

Minister of Communications Budhi Mulyawan Suyitno said on
Tuesday that the continuing conflict between state-owned
telecommunication company PT Telkom and its joint cooperation
(KSO) partner in West Java and Banten, AriaWest, had made it
necessary for the government to intervene.

"We will establish a temporary management team which will be
independent and acceptable to both parties," Budhi said in a
hearing with the House of Representative's Commission IV for
infrastructure and transportation.

He did not say when the team will be officially installed but
that the government was "working overtime" to make it happen as
soon as possible.

The team's duties were mainly to ensure the continuation of
telecommunication services in West Java and Banten, to resume
normal day-to-day operations in the region and to ensure that
employees receive their salaries, Budhi said.

Ariawest is partly owned by American telecommunication giant
AT&T.

The government's move to establish the independent team
followed recent threats by Telkom employees in West Java and
Banten to bring services in both provinces to a standstill if the
dispute between Telkom and Ariawest continued.

The employees, who are under Ariawest's management under the
KSO contract, claimed the dispute had troubled their activities
and made them concerned about whether they would continue to
receive their salaries.

In response to the workers' protests, the House of
Representatives recently called on the government to set up an
independent body to temporarily take over Ariawest's management.

Telkom's director of operations Komarudin Sastrakoesoemah said
that he welcomed the government's move.

"Telkom and AriaWest can fight all they like, but it is the
government's duty to make sure that telecommunication services
are uninterrupted," he said on the sidelines of the hearing with
the House.

The temporary management would replace the existing management
within the West Java and Banten operations, led by Michael Lee
Towne, Komarudin said.

The dispute between Telkom and Ariawest originated from a
disagreement between both parties over Telkom 's plan to buy out
Ariawest's stake in the KSO partnership.

The protracted dispute between both companies over the price
of Ariawest's stake had resulted in the deterioration of
telephone services in West Java and Banten, also known as
Regional Division (Divre) III, and both companies blamed each
other for the deteriorating service.

Bambang Tri Swasono Adi, the chairman of Telkom's workers
union (Sekar) in the Divre III KSO unit, who also attended the
hearing, said more than 60 percent of services in the region had
not been continued.

"And there are more than 90,000 applications for new telephone
lines which cannot be processed," he told The Jakarta Post.

In the meantime, AriaWest rejected the government's plan to
install a temporary management team, saying that any
deterioration of services in the regions was caused by Telkom's
move to block the KSO unit's operating funds.

"There is no need whatsoever for any 'third-party management'.
If the government would like to help the people of Banten and
West Java ... all it has to do is make Telkom start honoring the
terms of the KSO Agreement," AriaWest's chief financial officer
Stephen Dowling said in a statement on Tuesday.

AriaWest's vice president director Gatot S. Kahrmadji said
that the KSO unit was short on funds because it could not obtain
money collected from subscribers' monthly payments, as they were
collected in a bank account under Telkom.

"For the past few months, Telkom has been attempting to starve
the Divre III KSO Unit of funds by unlawfully withholding
subscriber payments," he said in the statement.

Telkom has denied all allegations, saying that AriaWest has
the legal means to acquire the money but refused to do so because
it was determined to solve the dispute by arbitration.

Ariawest filed last month an arbitration proceeding against
Telkom at the International Chamber of Commerce (ICC) in Paris

Komarudin said he expected the independent team formed by the
government would have the legal power to freeze the disputed bank
account and open a new one to collect revenue from subscribers'
monthly payments.

Bambang Tri Swasono Adi said that as of June 14, the KSO
unit's bank account totaled only Rp 10 billion. (tnt)