Thames Water pledges to stay despite woes

Thames Water pledges to stay despite woes

JAKARTA (JP): British firm Thames Water International declared
yesterday its determination to continue its 25-year cooperation
contract with city-owned water company PDAM Jaya despite the
current political and economic turmoil.

An executive of the firm, John Hurcom, said the company
remained here because it believed the country's economic
condition would soon recover.

An economic stance company would hold back at a time of such
economic turmoil, but we are committed here and are determined to
see it through, he told a news conference.

"We understand that the economy goes up and down. We knew that
within the 25 years of cooperation there would be political
changes, but we generally believe that Indonesia is a good part
of the world to invest in, still," he said.

Hurcom said a new name and logo for his firm was being
discussed to replace the current PT Kekar Thames Airindo (Kati),
a joint venture with PT Kekar Pola Airindo, a local company owned
by former president Soeharto's eldest son Sigit Hardjojudanto.

Sigit's company withdrew after his father's downfall on May 21
and sold its 20 percent stake worth about US$410,000 to its
British counterpart.

Hurcom said his local partner withdrew because "they felt that
their existence was having a negative effect on the project and
that we would not be successful with that partnership in place."

Thames chose Sigit's Kekar Pola because it had the same
interest in water development works and because it understood the
country's politics, Hurcom said.

"Whenever we go to any new country, we always look for a local
partner which has an interest in water and understands how the
country works because we did not understand Indonesia when we
arrived here," he said.

He dismissed the allegation that his firm got the contract
with PDAM Jaya merely because of Sigit's relationship to the then
president.

"Well, I don't know if that's a relevant question to ask. As I
understand it, the president's family and friends have joined a
large number of companies in Indonesia," he said.

"I guess if you say that to us, you could say that to almost
any other company here. So my question is, why you are saying it
to us? There are many other targets," he said.

Hurcom said the most important thing was to make sure that his
company would be the one with full control over the project
regardless of which company it dealt with.

He said full control in operation, finance and management was
important to enable his company to run the project the way it
thought it should be run.

"We didn't rely on the management capabilities of Kekar Pola
or any of those companies at all because we knew that we're going
to do it by ourselves. That was always our plan," he added.

Hurcom argued that his company had never in any way breached
the terms of the contract made with PDAM Jaya under its previous
cooperation with Kekar Pola.

"Our investment is entirely in accordance with the contract.
We're not failing to meet the terms of the contract. If we had,
PDAM Jaya would have been able to come to us and say: Look you've
not invested the way you should do. But they had never said so to
us," he said.

He said the investment program set for 1998 amounted to Rp
143.4 billion, consisting of, among others, Rp 11.9 billion for
water pipe restoration, Rp 84.8 billion for network extension and
Rp 19.4 billion for water leakage reduction.

The invested money was not given to PDAM Jaya but was used to
fund the operational activities under Thames' control, he said.

Thames does not receive a share of the water rates collected
from customers, nor does it have any say in setting the rates, he
said. Thames' profit is derived from the water charge set in the
contract and paid by the administration, he added.

He refused to comment on criticism from city councilors, PDAM
Jaya and city officials about his firm and French company
Lyonnaise des Eaux, which was also involved in the cooperation.

"What they say to the media is their business. But I can tell
you that they have not come to us about our investment program.
Never directly criticized or complained. Never anything," he
added.

Hurcom said Thames was now discussing the possibility of city
administration buying 5 percent of his company's stake.

"We're in a discussion with the administration at the moment.
So far we have agreed in principle that the administration can
acquire a number of the shares.

"What we have in mind is 5 percent as required by Indonesian
law. The terms and conditions on which they acquire the shares
have yet to be discussed in detail," he said. (cst)