MGTI to install 30,000 new telephone lines

JAKARTA (JP): PT Mitra Global Telekomunikasi Indonesia (MGTI) said on Thursday it would install 30,000 new telephone lines in Central Java and Yogyakarta by March to bring up a total of 350,000 lines.

MGTI president Eddy Hadijanto said the company, one of the five consortia which won joint operation with the state-owned PT Telkom, has put in 324,238 telephone lines in those areas as of Oct. 25.

This is 93 percent of the March target of 350,000 lines set by Telkom for MGTI, he said.

"We can complete installation of about 30,000 more lines by next March at the latest," Eddy told reporters.

Eddy said, however, the company needed additional funds of about US$100 million to meet the target.

He said the company could only withdraw $160 million out of US$480 million worth of syndicated loans signed by 16 foreign banks in late 1996. The rest could not be disbursed on account of the current political and economic uncertainty in the country.

"Therefore, we have to find some other ways to finance our project, so we're going to restructure our business planning," he said, but did not elaborate.

Mitra Global -- which groups state-owned PT Indosat, Telstra of Australia, NTT, Itochu and Sumitomo of Japan, and various domestic companies -- is assigned to install at least 400,000 lines in Central Java and Yogyakarta.

Eddy said MGTI had also put in 136 transmission lines as of Oct. 25, or 97 percent of the targeted 1,989 kilometer of an optic fiber network. It has also developed other telecommunications facilities in the area.

Earlier this year, Telkom President Asman Akhir Nasution said the monetary crisis had brought Indonesia's telecommunications joint operation project with the five partners to a standstill.

Nasution said the five joint operators had installed only 25 percent of the targeted two million fixed lines as of April, he said.

But this was quickly responded to by the five contractors, who said that 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 government has set a target of 6.7 million fixed lines during the current Five Year Development Plan which ends next March.

The contracts awarded to five private firms in January 1996, were to install and manage some two million fixed lines in Sumatra, Kalimantan, Sulawesi, Central Java and areas in eastern Indonesia. The management contracts terminate in 2010.

Telkom has postponed the requirement for the five private contractors to provide a bank guarantee of $5 million each in a bid to relieve the private contractors of financial burden.

It has also downgraded the monthly commission fee to a three- monthly levy. (das)