Lyonnaise des Eaux Jakarta

Published 01 Jan 2003
Reference 5038
Topic Strategy
Region Asia
Summary

On September 12, 1998, Christian Michelon, CEO of Pam Lyonnaise Jaya (PT Palyja), heard that his company was being sued by an association of “contractors” and a group of lawyers. His company obtained the concession of water treatment for the western part of Jakarta, the Indonesian capital. This case deals with the whole sequence of the contract negotiation and the subsequent events that took place in the aftermath of the Asian financial crisis.

Teaching objectives

The case deals with the problems of contact negotiation and implementation for BOT and concession contracts for large utilities. This type of contract represents some specific risk, often referred as �obsolescing bargaining�. It allows students to discuss the nature of BOT and concessions, their risks and benefits. It also deals with political risks in the context of an emerging country.

Keywords
  • AR2003
  • AR0203
  • RD0303
  • INTERNATIONAL STRATEGY
  • INTERNATIONAL MARKETING
  • BOT AND CONCESSION CONTRACTS
  • WATER TREATMENT
  • INDONESIA
  • POLITICAL RISKS
  • INTERNATIONAL SERVICES
  • INTERNATIONAL NEGOTIATIONS
  • JOINT VENTURES