Telkom's partners face trouble meeting targets

Telkom's partners face trouble meeting targets

JAKARTA (JP): Partners of state-owned telecommunications firm
PT Telekomunikasi Indonesia (Telkom) admitted yesterday the
crisis was making it difficult for them to meet targets for
telephone line installation.

Eddy Hadijanto, a spokesman of the five firms which
participate in the joint-operation schemes to build
telecommunication networks across the country, said the partners
had problems securing loans to continue their projects.

"Our biggest problem is the confidence crisis. Lenders will
think twice before they extend loans to us," Eddy told reporters
in the sidelines of a hearing with members of the House of
Representatives.

Eddy said the monetary crisis, which began in the middle of
last year, largely affected the continuity of the projects'
developments as prices of goods and services had multiplied
sharply.

The swollen value of investment slowed the realizations of
their business plans, he told House Commission IV for public
works, transportation, communications and public housing.

Telkom's partners have invested about US$1.21 billion since
the partnerships began in 1995, he said.

In October 1995, Telkom awarded 15-year joint-operation
contracts, popularly called KSO, to the five joint ventures to
install 2.25 million telephone lines by March 1999, and operate
them along with existing lines.

Telkom officially handed over management and operation of the
telecommunications networks outside Jakarta to the five companies
in January last year.

PT Pramindo Ikat Nusantara is responsible for installing
516,000 new telephone lines in Sumatra; PT Aria West
International 500,000 lines in West Java; PT Mitra Global
Telekomunikasi Indonesia (MGTI) 400,000 lines in Central Java; PT
Daya Mitra Malindo 237,000 lines in Kalimantan; and PT Bukaka
Singtel 403,000 lines in the country's eastern region, which
covers Sulawesi, Maluku, Irian Jaya and Nusa Tenggara.

Last week, Telkom cut the targets of new line installment to
1.27 million by next March to help the companies secure their
financial positions during the crisis.

At yesterday's hearing, the KSO's regional division for
Central Java and Yogyakarta reported yesterday it had built
27,544 new lines from 100,000 targeted as of March 31.

Of this number, 5,870 lines were ready to be marketed, the
division said in a written report to the commission members.

It said it was in discussion with Telkom to review the target
of the new lines by next year.

The KSO division covering the eastern region said yesterday
its partner PT Bukaka Singtel had declared that it would stop new
developments, and would only continue those currently in
construction.

"According to Telkom's evaluation, since the start of the
partnership, (our) partner has been delayed in the developments,"
division head Tatang Wigena said in a written statement.

Tatang said Bukaka had built 301,858 new centralized lines,
127,898 cable lines and 106,681 wireless lines as of last March.

"The target to install 403,000 new lines will be hard to
reach," he said. (das)