Cablegate: Indonesia On Board with U.S. Locomotives Bid and Mcc

VZCZCXRO2642
RR RUEHCHI RUEHCN RUEHDT RUEHHM
DE RUEHJA #1236 1770757
ZNR UUUUU ZZH
R 250757Z JUN 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 9377
INFO RUEHZS/ASEAN COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 5153
RUEHUL/AMEMBASSY SEOUL 4687
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC

UNCLAS JAKARTA 001236

SIPDIS
SENSITIVE

DEPT FOR EAP/MTS AND EEB/IFD/ODF-DWILLIAMS
DEPT PASS EX-IM - JABRAMSON, ECIAMPA
DEPT PASS COMMERCE - A/S CPADILLA
DEPT PASS USAID - PDELP

E.O. 12958: N/A
TAGS: BEXP ELTN EFIN ECON EAID PGOV ID
REF: JAKARTA 00775

SUBJECT: Indonesia on Board with U.S. Locomotives Bid and MCC

1. (SBU) Summary: In a meeting with Ambassador Hume on June 19,
2008, Minister of National Development Planning Agency (Bappenas)
Paskah Suzetta agreed to accept bids from U.S. companies on a $55
million locomotives contract for which General Electric (GE) intends
to bid. Minister Suzetta promised to provide timely data and
performance reports for Milennium Challenge Corporation (MCC)
review. End Summary.

RUMOR - CHINA THE EXCLUSIVE BIDDER
----------------------------------

2. (SBU) Bappenas is preparing to publish a "Green Book" that
authorizes tenders of selected public projects with tied aid
financing. Early in 2008, GE heard rumors that the Green Book would
restrict the locomotives project to Chinese tied aid financing,
effectively disqualifying GE from competing for the tender. GE also
believes the South Koreans intend to compete for this project. GE
has not produced evidence of competitor offers.

BAPPENAS MINISTER ACCEPTS U.S. BIDDERS
--------------------------------------

3. (SBU) Ambassador Hume discussed with Minister Suzetta the U.S.,
World Bank and international community's expectation that Indonesia
hold open procurements generally and that this process would result
in the best products and services. Ambassador Hume urged Minister
Suzetta not to restrict the locomotives contract to a specific
country and eliminate opportunities for U.S. companies to bid.
Miniser Suzetta verbally agreed to accept U.S. bidders with export
credit financing. Six Bappenas deputies responsible for planning,
transport, energy, finance, foreign assistance and MCC attended the
June 19 meeting.

OTHER ADVOCACY EFFORTS
----------------------

4. (SBU) Prior to Ambassador Hume's meeting with Minister Suzetta,
we delivered a letter from U.S. Under Secretary of Commerce
Christopher Padilla to Suzetta requesting GE be allowed to compete
for the locomotives contract. Ambassador Hume raised the issue with
Minister of Transportation Jusman Syafii Djamal (see reftel). We
also provided white papers and discussed the issue with the deputy
coordinating minister for international economic cooperation, a
national legislature member on the finance committee, the World Bank
country director and procurement specialist and officers of the
Government of Indonesia's (GOI) recently established Office of
Government Procurement Policy. All expressed support for an open
international tender for the locomotives contract. Post will
continue to monitor the issue in close cooperation with GE.

GOI LOOKS TOWARDS MCC REVIEW
----------------------------

5. (SBU) Ambassador Hume told Minister Suzetta that MCC Chief
Executive Officer Ambassador John J. Danilovich said he expected
continued White House support for MCC under a new administration.
Ambassador Hume underlined child health, immunization and
anti-corruption measures and the need for current data as key issues
with regards to MCC eligibility. Minister Suzetta said the GOI is
working with the World Health Organization and others to collect
current data. He said the GOI is committed to improving performance
in order to meet and exceed MCC performance indicators. Bappenas
issued a press release following the June 19 meeting regarding the
GOI's intention to meet the MCC performance indicators in order to
qualify for future Compact Status.

HUME

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