Telecoms winners announced

Telecoms winners announced

JAKARTA (JP): The ministry of tourism, post and
telecommunications announced yesterday the winners of four joint
operation contracts for telecommunications facilities in
Kalimantan, Central Java, Sumatra and West Java.

Secretary-General of the ministry, Jonathan Parapak, told a
press conference that the four 15-year contracts would see the
installation of 1.6 million new telephone lines before the end of
March, 1999.

Parapak said a consortium of Astra International and France
Telecom, called Pramindo Ikat, won the contract for installing
and operating 460,000 lines in Sumatra.

The contract for the West Java region, which will see the
installation of 500,000 lines, was won by the Tiga-A consortium,
which includes U.S. West Inc.

Informed sources said the other members of the Tiga-A
consortium were the Rajawali Group and Tomen Corp. of Japan.

The Mitra Global Telekomunikasi Indonesia consortium,
consisting of PT Indosat and its partners Nippon Telegraph &
Telephone (NTT) Corp. of Japan and Telstra Corp. of Australia,
will install and operate 440,000 lines in the Central Java
region.

For the Kalimantan region (237,000 lines), the contract was
won by Daya Mitra Malindo consortium which consists of Telekom
Malaysia Bhd. and ALatieF Corp. of Indonesia.

"However, the bidding process for the contract for the eastern
Indonesian islands is still underway because only one bid has so
far been submitted for that region," Parapak added.

A consortium of Bukaka Telekomindo and Singapore Telecom
International was the only bidder for the eastern Indonesian
region, in which 403,000 lines are to be installed.

The five projects are part of the government's program to
install five million telephone lines within the current Sixth
Five-Year Development Program (Repelita VI) which will end in
March, 1999.

Two million of the total have been set aside for private
companies under joint operation contracts, while the other three
million, to be installed in greater Jakarta and East Java, will
be managed by the state-owned domestic telecommunications company
PT Telkom.

Parapak said that total investment for the projects in the
five regions would range between US$2 billion and $3 billion.

Based on the contracts (including the one for the eastern
region), 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.

12 bidders

The four winners were selected from 12 bidders who were
themselves short-listed from 30 consortia who took part in the
pre-qualification assessment last November.

The two-page official press release about the winning bidders
was very brief. The statement did not, for example, give the
names of the local members of the winning consortia.

The statement said that the inter-ministerial team in charge
of evaluating the bids had been assisted by national and
international consultants, including PT Pan System, Hadiputranto,
Hadinoto & Partners (Baker McKenzie), Lazard Freres, McCarthy
Tetrault and Dimhart & Associates.

Three weeks ago, when the four winning bidders had been
selected, rumors were rampant that the government was trying to
jawbone the winners into joining up with the losing bidders.

The government flatly denied the rumors but the delay in the
announcement of the winning bidders until yesterday seemed to
lend some credence to the speculation.

According to rumors, the government later dropped what foreign
telecommunications executives here saw as the controversial
request for fear that the proposed method of negotiating the
contracts might affect the planned share issue by Telkom in New
York and London later this year.

According to the Request for Proposals issued by Telkom last
November to interested bidders, the purpose of the joint
operation contract for each region will be to perform all
activities required to expand, upgrade and operate
telecommunications systems in a world-class manner.

Each of the contracts covers the planning, design and
construction of new telephone lines and the upgrading of existing
installations, as well as the operation of the existing lines and
their integration with the new ones.

The contractors are entitled to a share of distributable
revenue, which is defined by Telkom as the net revenues from
operations under the contract after deducting the minimum Telkom
revenues and the operating expenses of the telecommunications
systems covered by the contracts. (pwn/vin)