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