Talks between Telkom and KSO partners show no progress
JAKARTA (JP): Director General of Post and Telecommunications Sasmito Dirdjo said on Tuesday that talks to end the dispute between state-owned telecommunications company PT Telkom and its joint cooperation scheme (KSO) partners showed no progress.
So far, talks between Telkom and its five partners had not even succeeded in narrowing-down the options made to end the dispute, he said after a meeting of officials from the Ministry of Transportation and Communication.
" (Talks) are still not focused. There are still many alternatives to be considered," Sasmito said.
He said that PT Telkom was persistent in its preference of modifying and continuing existing contracts, while the partners are keeping their stance as a joint venture company.
"If there's no compromise made then we will have to buy back the partners' assets," Sasmito said.
A further cause for dispute had also emerged from the differences in the valuation of each company's assets by each party's financial advisor, he said.
"Some of the results of the valuation are far from the government's own valuation, and some are closer," Sasmito said without elaborating further.
He said that ultimately it would be up to the shareholders to decide on the fate of the KSO scheme. But so far, the Ministry of Finance, representing the government's stake in Telkom, has not responded positively to the problem, Sasmito said.
"It's not that they are not tuned-in to the problem, but they have bigger things to think about," he explained, adding that on his part, he will not stop urging the Ministry of Finance to meet and resolve the problem.
The disputes between Telkom and its five partners have been long and drawn-out.
The joint cooperation scheme which started in 1996 to accelerate the growth of Indonesia's telecommunications sector did not go as well as planned.
The joint cooperation scheme was to allow private companies to build, operate, and develop telecom networks in five regions; Sumatra, West Java, Central Java, Kalimantan, and the eastern part of Indonesia.
The partners have three years to build two million new telephone lines in the five regions, and have the rights to operate and develop the networks until 2010 under a revenue sharing scheme.
The five partners are PT Pramindo Ikat Nusantara, which operates in Sumatra, PT Aria West International in West Java, PT Mitra Global Telekomunikasi Indonesia in Central Java, PT Cable & Wireless Mitratel in Kalimantan and PT Bukaka Singtel International in eastern Indonesia.
However, infrastructure building was halted as telecommunications equipment became more expensive and the business no longer profitable during the Asian economic crisis in 1998.
As of March 1999, only 1.4 million lines were successfully set up.
In 2000, when it seemed that business was to regain momentum, the KSO scheme became the source of fresh disputes as discontent surfaced over the continuation of the scheme. (tnt)