The water supply service of Jakarta, capital city of Indonesia, was privatised in 1998, under the military dictatorship of Suharto. The service was divided, with half the city being assigned to each of two multinational companies –Thames Water, from the UK, and Suez, from France. There was no competitive tendering, but there was corruption: both Thames and Suez gave shares in their subsidiaries to companies owned by relatives and cronies of Suharto. When the dictatorship was over thrown by a popular uprising later in 1998, the new city council expected the corrupt contracts to be terminated. Instead, Thames and Suez paid off their local partners, who had become a political liability, and clung onto the contracts.
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