JP/3/Pam

JP/3/Pam

PAM Jaya told to resume construction of water main

JAKARTA (JP): City councilors are urging the City Water
Company, PAM Jaya, to resume construction work of a 17-kilometer
water main, stretching from Pos Pengumben to a point near the
Orchid Hotel in West Jakarta.

"While the dispute between PAM Jaya and PT Grade Utama (the
contractor) has yet to be settled, the construction of the water
main should not be deferred, because it is for the interest of
the public," Arie Putra Bintana, the secretary of the City
Council's Commission D on public works, told The Jakarta Post.

Arie made the statement late last week after attending a
hearing between his commission with PT Grade Utama and its lawyer
from Hotma Sitompoel and Associates.

PAM Jaya has unilaterally annulled its contract with the
contractor. It accuses PT Grade Utama of subcontracting the water
main project without its approval. PAM has also charged that the
private company bribed its officials during the tender period.

Arie's stance was supported by Sumekar, another member of
Commission D, who said the dispute should not in anyway be used
by either party as an excuse to delay the completion of the
project.

"Both PAM Jaya and PT Grade Utama should place the interests
of the public above theirs, and resume the construction of the
project," Sumekar said.

Arie added that if PT Grade Utama should be proven to be in
the wrong, the work should be transferred to and continued by the
next lowest bidder.

Arie emphasized the importance of the continuation of the work
because the World Bank loaned the government money to finance the
project.

"In the near future we will meet with the municipal
administration officials who are handling this case," Arie told
the Post. The councilors have met with PAM Jaya to discuss the
problem.

Martin Peter Yan Malingkas, the president of PT Grade Utama,
said his company had completed 549 meters of the 17-kilometer-
long, 55.85-thick pipe when PAM Jaya ordered the firm to stop the
construction on March 3, 1994.

PAM Jaya said it annulled its contract with PT Grade Utama on
March 3 because it found out that the company had subcontracted
the entire construction project to Suhardi of PT Kokoh Semesta.
This move was reportedly documented in a May 19, 1993, agreement
between PT Grade Utama and Suhardi and Indrawan Djaja of PT Kokoh
Semesta.

According to PAM Jaya, this arrangement runs counter to the
statement made by PT Grade Utama one day before the firm was
declared to have won the contract on Jan. 6, 1994.

In the statement, PT Grade Utama committed itself to doing all
the work by itself and to assuming all responsibility if proven
to have subcontracted the entire project to a third party.

On March 11, 1994, PT Grade Utama asked PAM Jaya to review the
cancellation on the ground that it had terminated its contract
with PT Kokoh Semesta on March 8, 1993. This was reportedly
confirmed with a document verified by a notary.

PT Grade Utama also asked Governor Surjadi Soedirdja to review
the cancellation.

Feeling that both PAM Jaya and the governor ignored its plea,
PT Grade Utama then took the problem to the Jakarta
Administrative Court, which on March 25, 1994, ordered PAM Jaya
to delay the enforcement of the annulment. (arf)