Project Risks and Mitigation Measures

Monthly Progress Report October 2016 Western I ndonesia National Roads I mprovement Project 7 - 1 7 ISSUES and RECOMMENDATIONS

7.1 Current Situation

The main issues during this month of October 2016 are as follows: a The big negative slippage behind schedule of four 4 on-going construction sub- projects, Packages 5, 11, 13 and 15. b Delayed execution of Contract Agreement and issuance of Notice to Proceed will affect the twenty one 21 months time of completion of Contract Package 16. If the Contract Package could not get started soon, the completion date will keep on stretching farther beyond the expiry date of the loan agreement on December 31, 2017. c For almost eight 8 months now since the 2 nd week of March 2016, there was no regular Team Leader of the Design Supervision Consultants DSC as he cannot continue anymore to discharge his duties due to serious ilness.

7.2 Actions Required

a Four 4 of the on-going construction packages are on critical situation due to big negative progress slippages which may affect the timely completion of the projects. Design Supervision Consultant DSC shall closely monitor, preferably on a weekly basis, the Contractors progress output once the pending Contractors request for time extensions are granted and approved. Contractors shall prepare a Catch-Up Schedule on how to complete the remaining works within the extended contract time. High level management meeting is urgently suggested to address the issues behind the delayed work progress, aspecially for Packages 13 and 15. Package 5 needs acceleration of Contract modification and Package 11 needs Additional Project Budget Allocation DIPA FY 2016. b Processing time up to the issuance of Notice To Proceed shall be prioritized and expedited in order to minimize the completion dates from going farther beyond the December 31, 2017 loan closing date. c BALAI III as the other part of the contracting parties with Renardet the Engineer of the WINRIP Projects shall have to clarify from the Company how soon the replacement Team Leader will mobilize to the site. Monthly Progress Report October 2016 Western I ndonesia National Roads I mprovement Project 8 - 1 8 CORRESPONDENCES During the period the CTC received and issued letters. Lists of letters received and issued are shown in Appendix J.