KSOs install 1m new phone lines as of 1997
JAKARTA (JP): State telecommunications firm PT Telkom's five contractors announced yesterday they had installed 1.01 million new telephone lines by the end of 1997, or 50.1 percent of the target to be reached by the end of 1999.
The contractors, known as Telkom's KSO partners, said they had invested US$1.12 billion in their two years of existence and paid Telkom $200 million as an initial investment.
Eddy Hadijanto, president of PT Mitra Global Telekomunikasi Indonesia (MGTI), one of the five KSOs, said the 1.01 million lines spoke for themselves as a transparent and reliable figure.
The four other KSO partners are PT Pramindo Ikat Nusantara, PT Ariawest International, PT Cable & Wireless Mitratel and PT Bukaka Singtel International.
"This is quite an achievement, considering the monetary crisis which started mid-last year and the haze problem caused by forest fires," Eddy said.
Ariawest president John Vondras added: "Some people say we have brought nothing, but to me $1.4 billion is something."
Eddy and Vondras' comments follow statement by Telkom president Asman Akhir Nasution last week that the KSO partners had thus far built only about 25 percent of the targeted 2 million phone lines.
Nasution said the joint operation projects were not going well as none of the KSO operators had built any new lines since last December.
He added he was not pleased by the foreign contractors' reasoning that due to the monetary crisis the installation of the promised fixed lines would have to be postponed.
The country is currently facing its worst ever economic crisis after the rupiah began free falling in July. The currency plummeted to a lowest level of Rp 17,000 to the U.S. dollar in January, compared to Rp 2,450 in July. It was trading at 7,800 yesterday.
Eddy acknowledged that KSO partners had not built new phone lines since January because, besides the monetary crisis, they still had a large number of lines ready to offer to the public.
Nevertheless, Eddy said, KSO partners were in negotiations with Telkom to review their existing agreements, including a possible postponement for achieving the targeted 2 million lines.
"Despite the devastating crisis, our commitment to participate in the development of telecommunications infrastructure and service, including conveying technology, expertise and knowledge to Indonesia, remains high," Eddy said.
The government has targeted the installation 6.7 million fixed lines during the current Five-Year Development Plan which ends next March.
The five private contracts, awarded in January 1996, were to install and manage two million fixed lines in West Java (Ariawest), Central Java (MGTI), Sumatra (Pramindo), Kalimantan (Daya Mitra), and areas in eastern Indonesia (Bukaka Singtel). The management contracts terminate in 2010.
Nasution said last week that Telkom would be flexible with the contractors' various requests. "The government wants us to show good faith."
He explained that Telkom had postponed the requirement for the five private contractors to provide a bank guarantee of US$5 million each.
A monthly commission fee had also been reduced to a three- monthly levy.
In addition, Telkom had provided an assurance that the contractors would not be defaulted if they failed to deliver their promised lines by the end of March 1999, he said. (rid)