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)