Telkom covers expenses of Ariawest telecom regions

Telkom covers expenses of Ariawest telecom regions

JAKARTA (JP): State-owned telecommunications company PT Telkom
said on Monday that it had paid out an extra Rp 8.1 billion
(about US$852,631) for this month's salaries of its employees
under the management of PT AriaWest International.

Telkom director of operations and marketing Komarudin
Sastrakoesoemah said that this was the second time Telkom had to
bail out AriaWest's telecommunications regions in West Java and
Banten.

In July, Telkom provided Rp 19.2 billion for employees'
salaries, electricity and operational costs, Komarudin said.

"The funding, which we have provided for the last two months,
is a crucial step in ensuring that the operational activities in
the area can run properly and safely," he said in a statement.

Telecommunications services in West Java and Banten have been
steadily declining as the tension between Telkom and its joint
operation partner, AriaWest, peaked over the past year.

Telkom awarded Ariawest in 1996 with a 15-year contract under
the joint operation scheme (KSO) to operate and manage fixed-line
telecommunications facilities in the West Java and Banten
provinces. But over the past year, the two firms have been
exchanging allegations of a breach of contract.

Last month, the West Java and Banten areas were threatened
with a major telecommunications blackout as AriaWest failed to
pay its electricity bills, which amounted to Rp 1.3 billion, to
state electricity company PLN.

AriaWest has repeatedly denied any wrongdoing, saying that the
only reason it could not finance the operations in the two
provinces was because Telkom refused to disburse money received
monthly from customers.

AriaWest was unavailable for comment.

Earlier, Komarudin said that Telkom was willing to dole out
money for the telecommunications services for as long as the
dispute holds out, or until the arbitration proceedings filed by
AriaWest in May reached a conclusion.

AriaWest filed a suit with the Paris-based International
Chamber of Commerce (ICC), demanding $1.3 billion for losses
incurred by Telkom's alleged breach of contract.

Komarudin said that on Aug. 29 Telkom would also file a
countersuit in response to AriaWest's with the ICC.(tnt)