Sunday, June 26, 2005

The Potential External Problems

The Potential External Problems:

  • The un-stability of national currency rates. The contract was signed on October 2002 based on 1 US $= Rp 8,400.00, and since January 2003 the actual rate was 1 US $=9,600.00. It has deeply impacted to the imported materials or local materials that content imported parts.
  • The high degree of inflation of national or local economic situations.
  • The high interest of bank rates that exceed from 20% p.a on that recent times
  • The low advanced payment from the client (10%) and monthly progress payment scheme, instead of the project had a very fast-track schedule.
  • The possibility for misguidance on dealing with several sub-contractors, suppliers or even nominated sub-contractors related to the payment system from the client could brought the project into serious cash flow or liquidity problems.

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