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)