Mitra Global to invest $724m in Central Java
Mitra Global to invest $724m in Central Java
JAKARTA (JP): PT Mitra Global Telekomunikasi Indonesia, a
consortium which this week won a contract to install 400,000
telephone lines in Central Java, plans to invest A$1 billion
(US$724 million) in the next three to four years in the project.
However, the consortium will start collecting revenues early
next year as soon as it takes over the management of the existing
telecommunications facilities in the province from PT
Telekomunikasi Indonesia (Telkom), the state-owned domestic
telecommunications company, Ross Abbott, general manager for
Indonesia of Telstra Corp. of Australia, told The Jakarta Post
Tuesday evening.
Telstra is a member of the consortium, which also includes PT
Indosat, Nippon Telegraph & Telephone of Japan and PT Widya Duta
Informindo, a local consultancy and contracting company.
Abbott said that under the contract, the consortium will
construct new lines and modernize the existing system.
An industrial executive said that starting on Jan. 1 next
year, the consortium would begin network construction, management
of Telkom staff and collection of revenues from the operation of
the existing system.
The consortium is among the four awarded contracts to build a
total of 1.64 million telephone lines in Kalimantan, Central
Java, Sumatra and West Java.
Based on the contracts, Telkom will receive an estimated total
revenue of Rp 13.98 trillion (US$6.2 billion) from initial
investor payments, guaranteed annual minimum revenues and a
percentage of the distributable operation revenues throughout the
operational period of 15 years.
Revenues
Abbott said that revenues were expected to flow in by early
1996 and would be shared with Telkom.
However, he said, his consortium had yet to negotiate with
Telkom on the details of the contract specifications.
Abbott explained that the consortium would manage the existing
system in Central Java, currently consisting of about 400,000
lines, "to bring it to world standard", besides the planned
network.
The contract will involve the introduction of new systems and
training of Telkom's staff -- consisting of some 3,500 personnel
-- over the 15-year contract period.
He said that Telstra, which has a 20 percent stake in the
consortium, plans to station a team of up to 35 experts in
Indonesia in the next three years to establish the business and
to train local Telkom professionals.
The industrial executive said that over the 15 years of
cooperation with Telkom, the consortium will guarantee Telkom a
minimum net revenue equivalent to the amount that Telkom would
receive if it managed the existing lines.
If the revenue exceeds this amount, the executive said, the
additional revenue would be shared between the two parties, with
the consortium receiving 70 percent and Telkom the remaining 30
percent.
The executive said that by the end of the contract period,
Telkom was estimated to be able to reap Rp 900 billion.(pwn)