Thames PAM Jaya clarifies

Thames PAM Jaya clarifies

In reference to the article Water investors threaten to quit
agreement published in The Jakarta Post on March 25, we would
like to clarify the matter as follows.

PT Thames PAM Jaya (TPJ) would like to confirm its position
that TPJ is commited to providing clean water services to the
people of East Jakarta for the long term. Since the cooperation
began in 1998, TPJ has invested over Rp 434 billion and is
planning to invest a further Rp 208 billion in 2003 and over Rp 1
trillion by 2007. Our parent company provides all the funding for
this investment and neither Thames Water as our parent company
nor TPJ itself has ever discussed plans to leave Indonesia.

In the last five years, TPJ has rehabilitated and expanded the
existing network. This investment was implemented at a time when
many companies were leaving Indonesia, proving TPJ's commitment.

We see the rate adjustment as an urgent necessity to sustain
water services to the people of Jakarta. Pipes and equipment need
to be maintained and upgraded and there is a major investment
attached to this given the condition of the assets when our
contract began in 1998.

As well as normal inflationary factors, production costs have
gone up significantly in the past two years due to the quarterly
increases in electricity by PLN, labor costs and chemical costs
have exceeded revenue and in the absence of any rate adjustments
to cover these rising expenses, our capacity to continue
investing is clearly threatened.

Please remember that our last rate increase was in March 2001,
over two years ago, so an increase now is reasonable given the
inflationary environment we operate in.

RHAMSES SIMANJUNTAK
Director of Communications
and External Relations
PT Thames PAM Jaya
Jakarta