According to the Financial Times, the Indonesian power company PLN has made only a partial payment on the Paiton electric power plant. The partial payment leaves the PLN company millions of dollars short in repaying loans on the U.S. backed power plant. On August 20, 1999, PLN power President, Adhi Satriya confirmed that the payment for Paiton would be only one third the contracted amount. Paiton is owned by Edison Mission Energy and General Electric in partnership with Japan's Mitsui and the Indonesian firm of PT Batu Hitam Perkasa, which is controlled by Hashim Djojohadikusumo. Hashim Djojohadikusumo is the brother in law of former Indonesian dictator Suharto's youngest daughter. It is expected that Edison Mission Energy will to go to arbitration court with the Indonesian power company in order to seek repayment for the $2.6 billion power plant. Standard & Poor's warned that the insufficient payment by PLN could lead Paiton to default on $180 million in secured, triple-C rated, bonds. According to the Financial Times, PLN President Satriya also threatened to take the owners of Paiton to court over corruption allegations involving kickbacks to the Suharto family. According to former PLN President, Djiteng Marsudi, "corruption" raged out of control in the Paiton power project. Djiteng has said he was "forced" to sign unfavorable power plant contracts under pressure from Suharto's children and associates. Softwar has discovered that U.S. officials were also concerned about the corruption inside the Paiton power plant. Documents obtained from the U.S. Commerce Dept., and the Overseas Private Investment Corp. (OPIC) shows that U.S. government officials were aware of the corruption. According to the documents, Suharto's daughter and her brother in law Hashim were cut in for "2.5%" of the Paiton power plant. Of course, one would think the default of billions of Indonesian power projects should make the news. However, you will not see this story on CNN nor read about it in Time magazine... And the reason for such poor news coverage may surprise you. According to a recently discovered letter from the personal files of Ron Brown, Time-Warner sought and obtained Secretary Brown's help in an exclusive "recording" deal with Indonesia. According to Commerce Dept. documents, Suharto gave Time-Warner a sweetheart deal in CD production and distribution. In a 1995, Ron Brown wrote a letter to Hartarto Sastrosurarto, Indonesian Minister for Trade and Industry. According to Brown, "we would welcome the conclusion of the negotiations on phase II of the auxiliary dredging equipment project with Ellicott Machine Corporation and on Time Warner's investment in Indonesia's recording sector." letter attached below: ================================================================ OCT 27, 1995 His Excellency Hartarto Sastrosurarto Coordinating Minister for Trade and Industry Jakarta, Indonesia Dear Mr. Minister: It was a pleasure to meet with you here in Washington in mid-September, especially as Indonesia celebrates is 50th anniversary of independence. I especially enjoyed participating with you in the "Opportunity Indonesia 95" event on September 13, which is a good example of how to promote new trade and investment opportunities between our private sector companies. Clearly, Indonesia's geographic location as an Asian gateway, its expanding economy, and focus on technology development have attracted many companies to take a new look at trade and investment opportunities in Indonesia. I trust that the American firms which took part in "Opportunity Indonesia 95" will play a leading role in promoting further bilateral economic cooperation and development by establishing long-term partnerships with businesses in your country. In this regard, the development of the Asia Pacific Economic Cooperation has proven to be a powerful stimulus in each member's economy, as the annual summits have focused the world's attention on the Pacific Rim's potential to be a supplier of, and market for, products and services the world over. However, we know that it is important that intentions and commitments translate into contracts. I would like to bring to your attention a number of project involving American companies which seem to be stalled, including several independent power projects. These projects include the Tarahan power project, which involves Southern Electric; the gas powered projects in East Jave and East Kalimantan, which involves Enron; the Invicta power project, which involves British Gas with Raytheon as engineering/construction company and General Electric as the power equipment supplier for the project; and Ormat's geothermal power project at the Lahendong site. I know that privatization of power generation is an objective of the Indonesian Government and these projects would aid significantly in achieving that goal. In addition, we would welcome the conclusion of the negotiations on phase II of the auxiliary dredging equipment project with Ellicott Machine Corporation and on Time Warner's investment in Indonesia's recording sector. Your support for prompt resolution of the remaining issues associated with each of these projects would be most appreciated. Moreover, as each project is concluded, your public and private sectors will demonstrate Indonesia's serious commitment to economic expansion by providing a stable and healthy climate for additional investment. Ultimately, this will promote great participation by American companies in Indonesia's future development. I look forward to the opportunity of again meeting with you in Osaka. Sincerely, Ronald H. Brown ================================================================ Pcyphered SIGNATURE: A3F4DC4061B55CCFB0FD7828FA8FBA237FAFFC553663C99D15CB088CCFC8FF81 AF70D7B5AE0FA20A86E30045B3104649ABB04418E8881188FD93A96F3E258CD5 B96B57CF53A51584 ================================================================ SOFTWAR EMAIL NEWSLETTER www.softwar.net 08/26/99 *** to unsubscribe reply with "unsubscribe" as subject *** ================================================================
