Suez Lyonnaise and Thames to invest US$25m
Suez Lyonnaise and Thames to invest US$25m
JAKARTA (JP): Britain's Thames Water Overseas Ltd. and French
conglomerate Suez Lyonnaise des Eaux are to invest Rp 350 billion
(US$25 million) as part of their cooperation agreement with city-
owned water management firm PDAM Jaya to improve water
infrastructure in the capital, it was announced yesterday.
In a two-page release signed jointly by managing directors
John Hurcom of Thames and Christian Michelon of Suez Lyonnaise
made available to The Jakarta Post yesterday, the companies said
the funds would be the first stage of their investment program.
The decision "was made following their extensive planning and
investigation on the condition of the water supply infrastructure
in the capital city over the past few months", it said.
The two companies, however, did not disclose the delivery date
or the start of the projects.
Under the scheme, the two foreign firms will fund the repair
and replacement of approximately 120 kilometers of pipes; the
refurbishment of water treatment plants; the laying of
transmission mains, and construction of a new reservoir.
All the projects will be awarded to local contractors and are
expected to provide jobs for 600 people for approximately 12
months.
"Both companies are very keen to publicly announce this to the
people of Jakarta. It will enable us to reduce leakage throughout
Jakarta and serve more customers," said Hurcom.
His counterpart from Suez Lyonnaise added: "We are determined
to honor our obligations under the cooperation agreement with the
Jakarta administration and PDAM Jaya and in doing so will
continue to make a very significant investment in Indonesia."
The two foreign firms resumed their contracts with PDAM
recently after the Jakarta administration canceled tap water
concessions with PT Kekar-Thames Airindo (Kati) -- the Thames
joint venture -- and PT Garuda Dipta Semesta (GDS), which
involved Suez Lyonnaise, shortly after Soeharto resigned as
president on May 21.
The cancellation of the deals to supply water to Jakarta
customers was taken on the grounds that the awarding of the
projects was not done fairly.
Kati is owned by former president Soeharto's eldest son Sigit
Hardjojudanto in cooperation with a subsidiary of Thames.
GDS is a subsidiary of the giant Salim group owned by tycoon
Soedono Salim, which has close ties to the family of Soeharto.
All their business dealings are now under scrutiny by the
Indonesian government.
Last week, Suez Lyonnaise said in Paris that it has acquired a
further share of GDS and that it is now the majority shareholder.
In yesterday's statement, the two firms stated that they had
invested "substantial funds" during the initial development of
the cooperation agreement.
They, however, gave no details.
Under the initial cooperation, a 25-year deal, PDAM announced
an increase of up to 65.71 percent in water tariffs from April 1.
This sparked considerable public anger.
Under the new deal, PDAM has promised to lower its water
tariffs to appease Jakartans although this has yet to be
realized.
Last week, Governor Sutiyoso announced that the administration
decided to lower the tariffs by an average of 25 percent,
starting next month.
He said the decision was made after the two foreign business
partners agreed to the new tariff proposals.
"The new tariffs are still in accordance with the cross-
subsidy principle in that wealthy customers subsidize those in
the middle-to-lower classes," Sutiyoso said. (bsr)