Telkom says it is not daunted by AriaWest arbitration threat
Telkom says it is not daunted by AriaWest arbitration threat
JAKARTA (JP): State-owned telecommunications company PT
Telekomunikasi Indonesia (Telkom) said on Friday it is ready to
face arbitration proceedings by PT AriaWest International, one of
its five partners in a joint operation scheme.
Dina Arifani, the company's investor relations officer, said
that AriaWest's threat to commence arbitration proceedings was
not the first and that Telkom had formed a team of lawyers to
fight against the arbitration threat.
"We're ready to face it (the arbitration). But, it's a last
ditch effort to resolve the conflict. We still prefer to settle
the dispute through negotiations," Dina told The Jakarta Post.
AriaWest threatened on Thursday to commence arbitration
proceedings in Geneva to recover US$1.3 billion from Telkom as
long-standing efforts to amicably resolve their differences had
proved futile.
"It has become clear that Telkom doesn't want to settle the
dispute. So, unfortunately, there seems to be no alternative but
to put the case before an independent arbitrator in Geneva," the
company's chief financial officer Stephen Dowling said on
Thursday.
AriaWest also said that its staff had received death threats
and that its Bandung office had been terrorized by menacing
banners and posters under the auspices of Sekar, an organization
of Telkom employees.
Later on Friday AriaWest said it was evacuating all of its
staff from its Bandung office due to grave security concerns.
"We cannot take risks with the safety of our personnel," the
company's president John Vondras said in a statement.
AriaWest, which is partly owned by a unit of the United
States-based telecommunication giant AT&T, operates fixed
telephone lines in West Java under a joint operation scheme or
KSO with Telkom.
Dina denied that Telkom had terrorized or threatened AriaWest
executives and staff.
"It doesn't make sense that Telkom would use such uncivilized
and unethical methods," Dina said, adding that AriaWest's
allegations were exaggerated and groundless.
Ariawest and Telkom have been at odds over several issues
related to their contract, including the amount of money paid by
Ariawest to Telkom under the KSO contract. AriaWest accused
Telkom of not meeting their obligation to build extra phone lines
as pledged in the contract.
The two companies have been engaged in negotiations to settle
their dispute. AriaWest wants Telkom to bailout its operation but
the two companies are divided over how much Telkom should pay in
compensation to end the contract.
According to AriaWest it should be paid at least $1.3 billion
while Telkom says that the payment is worth only $160 million.
AriaWest said early this week that it had decided not to
disburse Rp 340 billion in revenue shares to Telkom because the
later failed to meet its obligation to build extra phone lines.
Dina also said that AriaWest's decision to withhold the funds
reflected AriaWest's lack of good faith to settle the
dispute. (03)