Joint venture firms ready to face lawsuit

JAKARTA (JP): Executives of two joint venture water management companies insisted on Thursday that they were "ready to answer" a lawsuit filed last week by a group of 17 lawyers, who allege that their cooperative agreements are illegal.

Giving no details of their legal preparation, Presidents of PT Pam Lyonnaise Jaya (Palyja) Christian Michelon and PT Thames Pam Jaya (TPJ) John Hurcom said in a joint statement that in the process to set up the joint ventures they "had scrupulously followed the Ministry of Home Affairs instruction No. 21/1996".

The cooperative agreement between city-owned water company PDAM Jaya and French company Suez Lyonnaise des Eaux to form Palyja, and PDAM Jaya and British company Thames Water Overseas Ltd. to set up TPJ, was the result of a one-and-a-half year negotiation under the coordination of officials from the Indonesian ministries of home affairs, public works, finance, and the National Development Planning Board, they said.

"PDAM Jaya was assisted by international lawyers and financial advisors as well as consultants appointed by the World Bank," the two executives said in the statement entitled Palyja and TPJ are Ready to Answer.

The 17 lawyers, grouped in the Association of Indonesian Reform Era Lawyers, filed a lawsuit on Friday at the Central Jakarta District Court against Governor Sutiyoso, PDAM Jaya and nine other parties over the cooperative agreements on water management in the capital.

The lawyers, who also claim to represent the Jakarta chapter of the Indonesian Water Contractors Association (Akaindo) and Jakarta residents, want the court to revoke the agreements between PDAM Jaya and Suez Lyonnaise des Eaux and Thames Water, saying that the deals are illegal because the two foreign companies were appointed directly and not after a competitive bidding process as required by presidential decree No. 16/1994.

They asked the court to order the foreign companies to return a total of Rp 240 billion in profits to the public.

The lawyers also asked the court to order the defendants to pay Rp 100 billion for losses suffered by Akaindo members and Jakartans.

According to company directors Michelon and Hurcom, the agreements signed on June 6, 1997 and effective from the beginning of February this year, were approved by the Minister of Home Affairs on Aug. 25, 1997.

"During the first seven months of operation Rp 178 billion was collected from consumers," they said.

Of this amount, Rp 137 billion was paid to the two joint venture companies, which have spent more than Rp 186 billion on operation costs during the same period, they said.

"While the rest, amounting to Rp 41 billion, has been paid to PDAM Jaya.

All payments were made in strict conformity with the contract," they added.

Governor Sutiyoso stressed on Monday his readiness to face the lawsuit, saying that he has set up a team of lawyers to defend him. (jun)