Telkom hopes to settle disputes with all KSO partners this year
Telkom hopes to settle disputes with all KSO partners this year
JAKARTA (JP): State-owned telecommunications company PT
Telekomunikasi Indonesia (Telkom) says it hopes the prolonged
conflict with its five joint cooperation scheme (KSO) partners
can be settled this year.
Telkom's investor relations manager Setiawan Sulistyono told
The Jakarta Post on Friday the company was still negotiating with
three of its KSO partners after finalizing deals with its KSOs in
Central Java and Kalimantan recently.
Telkom signed a memorandum of understanding on Thursday to
acquire 90.32 percent of PT Dayamitra Telekomunikasi, Telkom's
KSO partner operating in Kalimantan, worth $121.93 million.
The publicly listed company in February also sold its interest
in PT Mitra Global Telekomunikasi Indonesia (MGTI), the KSO
partner operating in Central Java, to state-owned company PT
Indosat. The assets of MGTI were taken over by Indosat for $375
million.
The negotiations with Telkom's partner in Kalimantan in
eastern Indonesia, PT Bukaka SingTel International, will also be
concluded soon, Setiawan said, adding that the company had opted
for a renewal with revision of the KSO contract.
"SingTel wanted (among other things) the right to add new
installed lines which was not specified in the old contract ...
the additional number will be up to them," he said over the
phone.
Setiawan said that the two other KSO partners, PT AriaWest
International and PT Pramindo Ikat Nusantara, favored the buy-out
option by Telkom rather than one of the other four options
offered by the government.
The existing options are to continue the existing agreement
with modifications to ensure ongoing commercial viability, to
establish a joint venture company with Telkom, to establish a
joint venture company with state-owned PT Indosat, for Telkom to
buy out the interests of the partners, or for the government to
give them licenses to operate.
Negotiations with AriaWest, Telkom's partner in West Java,
have so far been the toughest.
AriaWest corporate communications manager Denni Koswara said
that AriaWest's latest stance was to revert to the valuation of
its assets by the Canadian Imperial Bank of Commerce (CIBC)
valued at $1.3 billion.
"Telkom had previously offered its shares in PT Satelindo as
one of the alternative payment tools, but with it being sold to
Indosat, we are facing a new setback in negotiations," he told
the Post.
In accordance with the government's telecommunications
blueprint to terminate joint ownership between Telkom and
Indosat, in February Telkom agreed to sell its 22.5 percent share
in cellular operator PT Satelindo for $186 million to Indosat,
its 37.66 percent interest in Lintasarta for $38 million, as well
as the assets of the Central Java KSO region run by MGTI.
However, Setiawan said that according to Telkom's valuation,
AriaWest's assets in West Java were only worth about $160
million.
Denni said that AriaWest hoped that negotiations would resume
more intensively by the end of March, and that Telkom's
shareholders meeting in April would help improve the
negotiations.
The discord between Telkom and AriaWest does not stop at the
difference in asset valuation.
In September 2000, both companies signed a Good Faith Interim
Solutions Agreement and agreed to appoint auditor
PricewaterhouseCoopers (PwC) to investigate financial
improprieties, which allegedly took place when AriaWest's
management was led by a senior Telkom official up until last
year, Denni said.
It was agreed that, based on the results of the
PricewaterhouseCoopers audit, Telkom would pay AriaWest any
amount determined by the auditors to have been misappropriated,
unaccounted for, lost, stolen or unreasonably disbursed by the
KSO unit, he said.
The audit was started on Sept. 18, and a progress report was
delivered to Telkom on March 2, 2001.
On March 8, Telkom president M. Nazif issued a formal letter
to stop the audit on the grounds that the two companies had not
issued an engagement letter for PwC to begin auditing.
Setiawan Sulistyono said that the agreement had been to
appoint an auditor, which was PwC.
"But the work plan had not been agreed upon," he said,
explaining that working conditions and the scope of the audit was
still to be determined. (tnt)