Tommy, Ciputra given project

JAKARTA (JP): PT Citra Mandala Umbulan, a company jointly owned by the Humpuss Group and the Ciputra Group, has been appointed as the developer of the Rp 500 billion (US$215 million) water project in Umbulan, East Java, the province's governor, Basofi Soedirman, said over the weekend.

Basofi told Antara in Surabaya that the company would begin development of the water project in March, next year.

The Humpuss Group is controlled by the youngest son of President Soeharto, Hutomo (Tommy) Mandala Putra, while the Ciputra Group is owned by property tycoon Ciputra.

Basofi said the Umbulan project is designed to supply clean water to Citra Raya, a 2,000 hectare township in the western part of Surabaya, which was developed by the Ciputra Group.

The Umbulan project, around 55 kilometers south of Surabaya, the capital city of East Java province, is expected to supply around 4,000 liters of water per second.

It was offered for development to private companies 10 years ago, but the project's construction has been delayed.

The first to apply was Citra Lamtorogung Persada, which is owned by President Soeharto's eldest daughter, Siti Hardiyanti Rukmana (Mbak Tutut), and its two partners from Surabaya and Malaysia.

Many other private companies also expressed interest in the project. However, due to disagreement with the government over the water prices, they backed off. Among the companies were PT Bimantara Sitiwisesa, the Bakrie Group, PT Himpurna Ruba and PT Krakatau Engineering.

Minister of Public Works Radinal Moochtar earlier said that the developer of the water project should give priority to public interest by minimizing water prices.

"I understand that private companies want to make big profits, but they should also take into account the social aspect of the project," he said.

But Radinal said the government would cut the water subsidies to strike a balance between the interests of the government, which gives priority to social aspects, and the interests of the private sector, which gives priority to profits.

The subsidy cut was expected to increase the price of water by up to 25 percent. (bnt)