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Insiders · February 8th, 2006, 06:42 AM

8/2/06

We strongly believed that ITC had lied to the Governor in order to get another extension for obtaining FINANCIAL CLOSE.
Financial Close mean to provide 2 proofs of availability of fund by providing:-

1)Bank's statement on ready Credit Line of US$500 million for the project.
2)Proof from the BANK of EQUITY /PAID UP CAPITAL to the value of US$20million has been put into the project a/c.

It was reported by the press that Maglev Indonesia(MI) is committed to fulfill FINANCIAL CLOSE by providing proof of Equity of US$70million and financial credit line of US$600million based on the following:-

1)LETTER OF INTENT from 1 no. KOREAN BANK stating immediate fund of US$50million.

2)LETTER OF INTENT from NATIONAL KOREA BANK stating that credit line of 85% of total investment cost is already approved/available.

We understand both the LOI have been forwarded to SEKDA on 29 December 2005, to Head of Jakarta Legislature dated 29 December 2005, to Governor Sutiyoso on Thursday 26 January 2006 at the Governor's office during the recent meeting with the delegates of MI Consortium represented by representatives from OMNICO, ROTEM, Korean Construction, Korean Government, ST, SMRT.
Present from the Governor's office was the Governor himself, his representative, 3 assistants and 3 department heads handling transportation projects.

They (MI) proposed to FINANCIAL CLOSE on the condition that the Governor PEMPROV DKI :-

1)Grants legal confirmation to MI on the existing concession
2)That PEMPROV agrees to use MAGLEV TECHNOLOGY for the rolling stock
3)That PEMPROV rescind the Cooperation Agreement with PT JM/ITC and confirms that JM/ITC has defaulted and that MI will proceed to fulfill FINANCIAL CLOSE within 30 days thereafter.

We understand during the meeting with MI delegates, the Governor gave instruction (arm twist the foreign investors again ??) to merge with ITC/JM so that the local party (ITC) do not lose out and will not incur doubtful investment for the works done todate.

We further understand MI had on 28 January 2006 forwarded a letter of offer to ITC/JM with carbon copies to the Governor and the Head of the Jakarta Legislature in which MI offered ITC the following:-

1)Merging of EQUITY where MI will contribute an Equity of US$70mil and ITC with an Equity of US$20mil.
2)MAGLEV Technology with full financing from MI vide NATIONAL KOREAN BANK
3)Jakarta MONOREL to be renamed JAKARTA MAGLEV
4)ADHIKARYA will continue construction and MI will include another national contractor, WIKA, to speed up construction.

We believe ITC did not respond to this offer even disregarded it because ITC was not open to the idea of merger (greedy? want more? or still hoping for foreign investors to give them the money and they still run the whole show?) and its financial commitment (US$ 20M – maybe cannot be accepted under international auditor’s requirement) was doubted by MI.

As reported by the press, on 27 January 2006, ITC met up with the Governor with news in Indonesian Media as follows:-

Friday 27 January 2006-02-07
PT JM Fulfills Financial Closing Of US$500 Million

JAKARTA-MIOL: Jakarta Governor, Sutiyoso said that PT JM has fulfilled financial closing with a sum of US$500 million to realise the development of monorail in Jakarta.

" I have already met with PT JM on Thursday afternoon. They are ready with the technology and the funds. They have got an investor from a bank in Dubai," said Sutiyoso to reporters at City Hall, Friday 27/1.

According to him, at the moment 2 consortiums are ready to develop the monorail that is, PT JM and PT Maglev Indonesia. "Once again, what's important, I hope the 2 consortiums are able to merge to start developing the monorail. They were once under the same flagship," he said.

If they are unwilling to merge, then we will have to choose one of them. "Yes, we will select the most suitable, most probably the cheapest," he said. Sutiyoso further prevailed that PT Maglev had offered an investment to the tune of US$800mil and now proposed US$600mil whereas PT JM had proposed US$500mil to develop the monorail.

" From there, we can see a difference of up to US$100mil. The consequence of a heavy/expensive investment will induce a higher ticket price. We do not want that. It's clear that we will choose the cheaper one," he said.

(Why should HE care about the investment cost when the Government is not paying for it and the Government still retain control on the price of the ticket to be sold? From Siemens technology to ICMI self developed technology and now back to Siemens technology. Pls note Siemens do not have monorail technology!!.)

To summarise our DOUBT:

Our DUBAI’s contact found out that Banks in Dubai generally have no provision for any financing arrangements for projects in Indonesia (due to bad credit rating) and DUBAI’s Financial Bank only chooses projects which are Quick Yield with 100% return per year. What's the point of investing in the MONORAIL Project which will realise only a small return yield after more than 10 years operation (if profitable).

Our contact further confirmed that Global Petrochem Holding Pte Ltd Singapore (are not registered with MAS as a Financial Institution in S’pore whatsoever as claimed by ITC) cannot afford to give financing of US$500 mil and that ITC has used its name for something which is not true.(Earlier, ITC claimed that they have the fund ready from JP Morgan!!)

"We are able to proceed with the development process while waiting for the conditions of administration. There is no need to wait for the fund release from the bank as that is more for the cost of the monorail and its system," stressed Sukmawaty. (What type of nonsense is this about?? Does she understand the international concept/requirement of F.C ?? )

We came to the conclusion that ITC has not done the FINANCIAL CLOSE. How are they able to FC when even the conditions of administration cannot be met and become an issue and reason to prolong/extend the time for them.

It seem all of ITC's promises have become LIES to all. Pemprov DKI should realise all these lies told to the public by ITC under the nose of PEMDA DKI.

Foreign Investors are getting impatient with the Government's indecision and time will come soon when they choose to leave this investment altogether.

We strongly believed MI is ready with the Korean Banks when called upon by the Governor to show proof of its investment capability while we are doubtful of ITC's claims and statements that they have done FINANCIAL CLOSE. We strongly believe that all their claims are lies.

The Public should request the Legislative Council to immediately take steps to garner the truth and see IF the so called DUBAI BANK and m/s Global Petrochem Holding Pte Ltd has agreed and is READY,ABLE & WILLING to FINANCIAL CLOSE this project for ITC. The best is for the Public to relay their views to the Legislative Council so that ALL will be able to judge for themselves, after all, this transportation is for the Public. So it is time for the Legislative Council to step in and extricate the truth from ITC and MI instead of waiting for an indecisive Governor.

We are of the OPINION that ITC cannot fulfill FINANCIAL CLOSE and their time has lapsed on 31 January 2006 (after so many earlier extensions). ITC is only looking for further excuses to buy more time and waste the PUBLIC time.

February 8th, 2006, 06:42 AM	#5
Insiders Registered User Join Date: Sep 2005 Posts: 8	Information and Opinion 8/2/06 We strongly believed that ITC had lied to the Governor in order to get another extension for obtaining FINANCIAL CLOSE. Financial Close mean to provide 2 proofs of availability of fund by providing:- 1)Bank's statement on ready Credit Line of US$500 million for the project. 2)Proof from the BANK of EQUITY /PAID UP CAPITAL to the value of US$20million has been put into the project a/c. It was reported by the press that Maglev Indonesia(MI) is committed to fulfill FINANCIAL CLOSE by providing proof of Equity of US$70million and financial credit line of US$600million based on the following:- 1)LETTER OF INTENT from 1 no. KOREAN BANK stating immediate fund of US$50million. 2)LETTER OF INTENT from NATIONAL KOREA BANK stating that credit line of 85% of total investment cost is already approved/available. We understand both the LOI have been forwarded to SEKDA on 29 December 2005, to Head of Jakarta Legislature dated 29 December 2005, to Governor Sutiyoso on Thursday 26 January 2006 at the Governor's office during the recent meeting with the delegates of MI Consortium represented by representatives from OMNICO, ROTEM, Korean Construction, Korean Government, ST, SMRT. Present from the Governor's office was the Governor himself, his representative, 3 assistants and 3 department heads handling transportation projects. They (MI) proposed to FINANCIAL CLOSE on the condition that the Governor PEMPROV DKI :- 1)Grants legal confirmation to MI on the existing concession 2)That PEMPROV agrees to use MAGLEV TECHNOLOGY for the rolling stock 3)That PEMPROV rescind the Cooperation Agreement with PT JM/ITC and confirms that JM/ITC has defaulted and that MI will proceed to fulfill FINANCIAL CLOSE within 30 days thereafter. We understand during the meeting with MI delegates, the Governor gave instruction (arm twist the foreign investors again ??) to merge with ITC/JM so that the local party (ITC) do not lose out and will not incur doubtful investment for the works done todate. We further understand MI had on 28 January 2006 forwarded a letter of offer to ITC/JM with carbon copies to the Governor and the Head of the Jakarta Legislature in which MI offered ITC the following:- 1)Merging of EQUITY where MI will contribute an Equity of US$70mil and ITC with an Equity of US$20mil. 2)MAGLEV Technology with full financing from MI vide NATIONAL KOREAN BANK 3)Jakarta MONOREL to be renamed JAKARTA MAGLEV 4)ADHIKARYA will continue construction and MI will include another national contractor, WIKA, to speed up construction. We believe ITC did not respond to this offer even disregarded it because ITC was not open to the idea of merger (greedy? want more? or still hoping for foreign investors to give them the money and they still run the whole show?) and its financial commitment (US$ 20M – maybe cannot be accepted under international auditor’s requirement) was doubted by MI. As reported by the press, on 27 January 2006, ITC met up with the Governor with news in Indonesian Media as follows:- Friday 27 January 2006-02-07 PT JM Fulfills Financial Closing Of US$500 Million JAKARTA-MIOL: Jakarta Governor, Sutiyoso said that PT JM has fulfilled financial closing with a sum of US$500 million to realise the development of monorail in Jakarta. " I have already met with PT JM on Thursday afternoon. They are ready with the technology and the funds. They have got an investor from a bank in Dubai," said Sutiyoso to reporters at City Hall, Friday 27/1. According to him, at the moment 2 consortiums are ready to develop the monorail that is, PT JM and PT Maglev Indonesia. "Once again, what's important, I hope the 2 consortiums are able to merge to start developing the monorail. They were once under the same flagship," he said. If they are unwilling to merge, then we will have to choose one of them. "Yes, we will select the most suitable, most probably the cheapest," he said. Sutiyoso further prevailed that PT Maglev had offered an investment to the tune of US$800mil and now proposed US$600mil whereas PT JM had proposed US$500mil to develop the monorail. " From there, we can see a difference of up to US$100mil. The consequence of a heavy/expensive investment will induce a higher ticket price. We do not want that. It's clear that we will choose the cheaper one," he said. (Why should HE care about the investment cost when the Government is not paying for it and the Government still retain control on the price of the ticket to be sold? From Siemens technology to ICMI self developed technology and now back to Siemens technology. Pls note Siemens do not have monorail technology!!.) To summarise our DOUBT: Our DUBAI’s contact found out that Banks in Dubai generally have no provision for any financing arrangements for projects in Indonesia (due to bad credit rating) and DUBAI’s Financial Bank only chooses projects which are Quick Yield with 100% return per year. What's the point of investing in the MONORAIL Project which will realise only a small return yield after more than 10 years operation (if profitable). Our contact further confirmed that Global Petrochem Holding Pte Ltd Singapore (are not registered with MAS as a Financial Institution in S’pore whatsoever as claimed by ITC) cannot afford to give financing of US$500 mil and that ITC has used its name for something which is not true.(Earlier, ITC claimed that they have the fund ready from JP Morgan!!) "We are able to proceed with the development process while waiting for the conditions of administration. There is no need to wait for the fund release from the bank as that is more for the cost of the monorail and its system," stressed Sukmawaty. (What type of nonsense is this about?? Does she understand the international concept/requirement of F.C ?? ) We came to the conclusion that ITC has not done the FINANCIAL CLOSE. How are they able to FC when even the conditions of administration cannot be met and become an issue and reason to prolong/extend the time for them. It seem all of ITC's promises have become LIES to all. Pemprov DKI should realise all these lies told to the public by ITC under the nose of PEMDA DKI. Foreign Investors are getting impatient with the Government's indecision and time will come soon when they choose to leave this investment altogether. We strongly believed MI is ready with the Korean Banks when called upon by the Governor to show proof of its investment capability while we are doubtful of ITC's claims and statements that they have done FINANCIAL CLOSE. We strongly believe that all their claims are lies. The Public should request the Legislative Council to immediately take steps to garner the truth and see IF the so called DUBAI BANK and m/s Global Petrochem Holding Pte Ltd has agreed and is READY,ABLE & WILLING to FINANCIAL CLOSE this project for ITC. The best is for the Public to relay their views to the Legislative Council so that ALL will be able to judge for themselves, after all, this transportation is for the Public. So it is time for the Legislative Council to step in and extricate the truth from ITC and MI instead of waiting for an indecisive Governor. We are of the OPINION that ITC cannot fulfill FINANCIAL CLOSE and their time has lapsed on 31 January 2006 (after so many earlier extensions). ITC is only looking for further excuses to buy more time and waste the PUBLIC time.