Selamat Pagi, Bobby. Here in Malang, there is no sign of negative effects due to the monetary problems that were so visible in Jakarta. This city is primarily a University town (I would call it The Beverly Hills of Indonesia) with tourism and agriculture providing supporting economic bases. We took some pictures of a main residential area which (other than the architecture) would fit into the Beverly Hills landscape quite well. I will email copies to you when I return.
Tourism is down. We had lunch at a resort hotel up the mountain, and the guide advised that their business is down 50% during the week and 30% on weekends.
Other than that, this area seems to be isolated from the currency devaluation for the most part. As they do not rely on imports and generally is self sufficient I guess 10,000 rupiah is still 10,000 rupiah.
I understand however that some of the North American franchises are suffering elsewhere. Apparently MacDonalds have shut down 14 of their restaurants. I saw a Dunkin Doughnut here in town that was closed. I understand that the high franchise fee and cost of import materials with the currency devaluation have priced some of them out of the market.
On the other hand, I read in the paper this morning that Starbucks announced in Taiwan that they are very bullish on Asia.
Today we visited the Master Station for the project here in Malang, climbed to the top of a mountain to inspect a repeater station and visited a water monitoring and a rain gauging station.
Sudarto and I had dinner with a senior ministry officer this evening, who advised that one of the three other finalists confided in him that they didn't think they had a chance against Unitec. I talked to him about a new concept that I have been toying with, and he asked that we submit it in our proposal. I don't wish to reveal too much about it on the net as our competitors may be eaves dropping, but I can confidently say that it will entirely change the way Flood Warning SCADA systems will operate in the future.
Tomorrow we will visit some of the Sub Master Stations and other sites. We leave at 06:00 in order to finish by 15:00 allowing time to clean up and return to Surabaya to catch our flight to Jakarta.
I have meetings with senior officials with PT PLN (Persero), the national electricity utility. I think PLN is one of the institutions that has been devastated by the devaluation as most of their capital expansion projects are financed with foreign loans. I understand that their equity base has been wiped out. I will get further information when I speak with them.
Selamat Jalan,
John
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