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                                                                    EXHIBIT 4.46



                                 SUPPLY CONTRACT
                                       FOR
                              CAPACITY EXPANSION OF
                             SUBMARINE CABLE SYSTEM
                          TANJUNG PANDAN -- PONTIANAK

                                     BETWEEN
                        PT TELEKOMUNIKASI INDONESIA, TBK.
                                       AND
                                 NEC CORPORATION

                         NO.: K.TEL. /HK.910/UTA-00/2005

This Contract is made and entered into this                   of July 2005, by
                                           -------------------
and between the Parties:

I.   PT TELEKOMUNIKASI INDONESIA, TBK, a telecommunication services and network
     provider having its domicile at Jalan Japati No.1, Bandung-40133,
     Indonesia, in this this Contract duly represented by S A R W O T O, in his
     capacity as HEAD OF TELKOM LONG DISTANCE DIVISION, hereinafter in this
     Contract referred to as TELKOM; and

     II. NEC CORPORATION, a company established under the laws of Japan,
     domiciled at 7-1, Shiba 5-chome Minato-ku, Tokyo 108-8001, Japan,
     hereinafter referred to as CONTRACTOR, in this Contract duly represented by
     TORU HAMANAKA, in his capacity as GENERAL MANAGER OF SUBMARINE NETWORKS
     DIVISION, NEC CORPORATION


TELKOM and CONTRACTOR are individually referred to as "PARTY" and collectively
as the "PARTIES".

                                   WITNESSETH

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a.   whereas TELKOM through its letter Ref.No.TEL.895/LG.000/DLD-00/2004 dated
     17 December 2004 has issued direct appointment with sold the Request for
     Proposal (RfP) Document to the CONTRACTOR;

b.   whereas to respond the TELKOM's letter as mentioned in point a. above, the
     CONTRACTOR through its letter dated 28 December 2005 has submitted a
     proposal to TELKOM cq. Tender Committee;

c.   whereas TELKOM trough its letter Ref. No. : TEL.257/TK.220/DLD-51/2005
     dated 10 May 2005, has appointed CONTRACTOR to execution the Procurement
     and Implementation of Expansion Capacity Tanjungpandan-Pontianak which is
     amounting to USD.42,713,568 and Rp.154.220.640.002 (equivalent to total
     Rp.559.145.264.642 excluding 10% VAT with exchange rate is USD.1 = Rp 9,480
     dated April 8, 2005);

d.   whereas CONTRACTOR through its commitment letter dated 11 May 2005 hereby
     commit and agree to carry out the Works expressed its consent to the price
     agreed and ability to execute the Works as specified in this Contract in
     accordance with point c. mentioned above;

e.   whereas between TELKOM and CONTRACTOR has been held the contract
     discussions and negotiation in accordance with Minutes of Meetings on
     12-31 May 2005;

NOW THEREFORE, based upon the above-mentioned considerations, the Parties hereto
have agreed to bind each other into this Contract under the following terms and
conditions:

                                   CHAPTER I
                          GENERAL TERMS AND CONDITIONS

                                    ARTICLE 1
                                   DEFINITIONS

a.   "CONTRACT" shall mean the agrement entered into between TELKOM and
     CONTRACTOR, as recorded in the Contract form signed by the Parties
     including all attachments thereto and amendment

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     documents incorporated by reference therein;

b.   "PROJECT" means the Works to be undertaken by CONTRACTOR for the
     procurement and installation of the System, Expansion Capacity Submarine
     Cable Tanjungpandan-Pontianak to be carried out on single responsibility
     basis.

c.   "TELKOM" means PT. (PERSERO) TELEKOMUNIKASI INDONESIA TBK, the public state
     owned company of Indonesia for public telecommunication services, acting as
     the owner of the Project.

d.   "CONTRACTOR" means a contractor who has signed the Contract with TELKOM for
     the implementation of the Project on single responsibility basis.

e.   "SUB-CONTRACTOR" means any party or parties approved by TELKOM having a
     direct contract or contracts with CONTRACTOR for the performance of any
     part or parts of the Works to be executed under the Contract.

f.   "TURNKEY BASIS" means the Scope of Work where upon the effective date of
     this Contract, CONTRACTOR shall be fully and solely responsible for the
     survey, design, development, manufacture, delivery, supply, installation,
     integration and commissioning of the System, and the remedying of any
     defects, so as to make the System ready for service and the CONTRACTOR
     shall also do everything necessary as reasonably may be inferred from this
     Contract as being required of CONTRACTOR to perform all of its obligations
     under this Contract.

g.   "WORKS" means the objective of the Contract, i.e., supply of Goods, survey,
     design, manufacturing, transportation, installation / construction,
     permits, testing, commissioning, integrating, complete and operational
     System as required, documentation, training and any other associated
     services or activities whatsoever for the execution of the Project under
     the Contract by the CONTRACTOR up to the Final Acceptance Certificate.

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h.   "GOODS" means and include all kinds of machinery, apparatus, materials,
     articles, spare parts, necessary tools and test equipment, relevant
     drawings, operation manuals, and handbooks which is required by CONTRACTOR
     to fulfill CONTRACTOR's obligation under this Contract.

i.   "SERVICES" means the CONTRACTOR's services and activities such as survey,
     design, installation/ construction, progress/ quality control, testing,
     reporting, commissioning and training which the CONTRACTOR is required to
     execute under the Contract.

j.   "REQUEST FOR PROPOSAL" means the documents i.e. "General Conditions",
     "Technical Specifications" and any additional notice which was given to the
     CONTRACTOR.

k.   "CONTRACT PRICE" means the price including any applicable Value Added Tax
     to the CONTRACTOR for completion of the Works under this Contract.

l.   "TELKOM'S PROJECT MANAGER" means TELKOM's staff duly authorized by TELKOM
     to act as their representative for the execution of the Project.

m.   "CONTRACTOR'S PROJECT MANAGER" means CONTRACTOR's person duly authorized by
     CONTRACTOR to act as their representative for the execution of the Project.

n.   "DEFAULT" means any of negligent act or failure in the implementation of
     the Project in respect of the Contract.

o.   "SYSTEM" means the capacity expansion of 10Gbit/s x 2 wavelengths x 1 fiber
     pair for TELKOM's Exisiting System.

p.   "TELKOM'S EXISTING SYSTEM" means TELKOM's exisiting Tanjung Pandan --
     Pontianak submarine cable system


q.   "TECHNICAL SPECIFICATION" shall mean technical specifications as mutual
     agreed by both Parties and as mentioned in the Attachment-7 of this
     Contract.

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r.   "SITE" means a place or places to which the Goods are to be delivered or
     where the Works are to be performed by the CONTRACTOR.

s.   "INTEGRATION" shall mean the integration between the System provided by
     CONTRACTOR and/or TELKOM's Exisitng System in accordance with the Technical
     Specification.

t.   COMMISSIONING" means activities that shall be done by the CONTRACTOR in
     preparation of the Acceptance Test.

u.   "ACCEPTANCE TEST (AT)" shall mean physical and electrical charateristic
     checking of the installation and materials, and testing of System to test
     the proper functionality of each Site as mentioned in Article 27 of this
     Contract of the Goods installed;

v.   "ACCEPTANCE TEST REPORT" shall mean written document being made and signed
     by Parties hereto through their respective duly representatives, certifying
     the Acceptance Test has been completed and stating the results;

w.   "ACCEPTANCE TEST CERTIFICATE" (ATC hereinafter referred to as BAUT) means
     an official written statement signed by acceptance test team assigned by
     both Parties, indicating that the Works have been performed, completed,
     tested satisfactorily and can be operated commercially in accordance with
     the Contract. BAUT shall be released for System;

x.   "GOODS ARRIVAL CERTIFICATE" means an official written statement issued by
     TELKOM's Project Manager indicating that all of the relevant Goods have
     arrived at a Site.

y.   "SYSTEM ACCEPTANCE CERTIFICATE (SAC) / FIRST HAND-OVER CERTIFICATE
     (BAST-I)" means an official written statement issued by TELKOM's Project
     Manager indicating that the Works have been performed, completed and tested
     satisfactorily, and handed over from CONTRACTOR to and accepted by TELKOM
     in accordance with the Contract

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     and starting of warranty period;

z.   "FINAL ACCEPTANCE CERTIFICATE OR SECOND HAND-OVER CERTIFICATE (BAST-2)"
     means an official written statement issued by TELKOM's Project Manager
     indicating that the warranty period of 5 (five) years for System is over
     and all CONTRACTOR's obligations has been fulfilled under this Contract;

aa. "CONSTRUCTION EQUIPMENT" means the equipment, tools and machinery including
     specialized test equipment brought to the Site by the CONTRACTOR for the
     execution of the Contract, but not to be purchased by TELKOM.

bb.  "INSPECTOR" means the representative(s) or person(s) duly authorized by
     TELKOM to inpect the Goods and Services under the Contract.

cc.  "EFFECTIVE DATE OF CONTRACT" or "EDC" means the date on which contract is
     signed by TELKOM and the CONTRACTOR in accordance with Article 55.

dd.  "INFORMATION" means information whether written or oral, including but not
     limited to documentation, specifications, reports, data, notes, drawings,
     models, patterns, samples, software, computer outputs, designs, inventions
     whether patent can be obtained or not and know how.

ee.  "MONTHS" and "DAYS" denote Gregorian calendar months and calendar days,
     respectively.

ff.  "BILL OF QUANTITY" or "BOQ" means the bill of quantities as set out in
     Attachment-1.

                                    ARTICLE 2
                                COUNTRY OF ORIGIN

2.1  All Goods supplied under the Contract shall have their origin in the member
     countries and territories eligible under the rules of the Government of
     Indonesia.

2.2  For the purpose of this Article "origin"

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     means the place where the Goods are produced. Goods are produced when a new
     product is commercially recognized as a result of manufacturing, processing
     of substantial and major assembling of components, and is substantially
     different in basic characteristics or in purpose or utility from its
     components.

2.3  The origin of the Goods is distinct from the nationality of the CONTRACTOR.

                                    ARTICLE 3
                                 SCOPE OF WORKS

3.1  The Scope of this Contract covers the procurement and installation of the
     System which encompass the Sites according to the configuration, Bill of
     Quantity, capacity plan, Plan of Work, and Technical Specification, etc. as
     set out in this Contract.

3.2  For the purpose of the implementation of the Works, CONTRACTOR shall carry
     out at least the followings:

     a.   Survey, design and engineering;
     b.   Procurement and or manufacturing of equipment, spare part, tools and
          measuring equipments and its accessories and delivery of the equipment
          to the Site;
     c.   Implementation, integration of System to TELKOM's Existing System;
     d.   Commisioning and testing;
     e.   Warranty and long term support;
     f.   All risk insurance
     g.   Training.
     h.   Documentation.

3.3  The Scope of Works shall be adjusted and executed under the amendment
     pursuat to Articles 37 and 38 of this Contract.

3.4  This Contract is covering various steps involved in the procurement and
     installation of the System Capacity Expansion Submarine Cable
     Tanjungpandan-Pontianak on a Turnkey basis.

                                                                               7

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                                    ARTICLE 4
                                    STANDARDS

The Goods supplied under this Contract shall conform to Attachement-7 (Technical
Specification). When no standard is detailed therein, then the latest standards
ITU-T at the time of the Contract shall be applied. In case, both of standars
not obtained than the country of origin standards which are issued by the
relevant institution shall apply.

                                    ARTICLE 5
                    USE OF CONTRACT DOCUMENTS AND INFORMATION

5.1  The CONTRACTOR shall not, without TELKOM's prior written consent,
     disclose the Contract, or any provision thereof, or any specification,
     plan, drawing, pattern, list, schedule, sample or information furnished by
     or on behalf of TELKOM in connection therewith, to any person other than a
     person employed by the CONTRACTOR in the performance of the Contract.
     Disclosure to any such employed person shall be made in confidence and
     shall extend only so far as may be necessary for the purpose of performance
     of the Works.

5.2  The CONTRACTOR shall not, without TELKOM's prior written consent, make
     use of any document or information enumerated in Article 5.1 except for
     purpose of performing the Contract.

5.3  Any documents, mentioned in Article 5.1 other than the Contract itself,
     shall remain the property of TELKOM and shall be returned (and all copies)
     by the CONTRACTOR to TELKOM on completion of the Contract if so required by
     TELKOM.

                                    ARTICLE 6
                                  PATENT RIGHTS

6.1  The CONTRACTOR shall indemnify TELKOM against all third party claims of
     infringement of patent, trademark, copyrights or industrial design rights
     arising from the use of the Goods, the performance of the Works or the
     operation of the System, or any part thereof in Indonesia.

6.2  The CONTRACTOR shall only have the obligations as set out in this Article
     6, if

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     TELKOM: a) gives CONTRACTOR prompt written notice of any alleged or actual
     claims, b) allows CONTRACTOR on its request to directly or indirectly
     control the defense and/or settlement of such claim, c) does not consent to
     any judgment or decree or does any other act in compromise of any claim
     without first obtaining CONTRACTOR's written consent, and d) provides
     CONTRACTOR all reasonable cooperation and information as may be requested
     by CONTRACTOR.


6.3  Furthermore, such indemnity shall not cover such infringement or claim
     arising from:

     1)   The CONTRACTOR's adherence to TELKOM's direction to use materials or
          parts of TELKOM's selection; or

     2)   Such material or parts furnished to the CONTRACTOR by TELKOM, other
          than in each case, a) items of the CONTRACTOR's design or selection or
          b) the same as any of the CONTRACTOR's commercial merchandise or in
          processes or c) machines of the CONTRACTOR's design or selection used
          in the manufacture of such standard products or parts; or

     3)   Use of the Goods other than for the purposes indicated in, or
          reasonably to be inferred from, this Contract or in conjunction with
          other products; or

     4)   Modification of the Goods by TELKOM, without prior expressed written
          approval by CONTRACTOR.

                                                                               9

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                                    ARTICLE 7
                         PERFORMANCE AND WARRANTY BONDS

7.1. The performance bond shall be established in US Dollar currency and shall
     be in surety bond or bank guarantee issued by insurance company or bank
     according to TELKOM requirement (Bank Mandiri, BNI 46, Bank Rakyat
     Indonesia Bank BUKOPIN, Bank Mega, Ban NISP, Bank BCA, Bank Niaga,
     Citibank, Standard Chartered Bank, ABN AMRO, HSBC, Asurandi JASINDO,
     Asuransi Kredit Indonesia, Asuransi Eksport Indonesia) amounting of 5%
     (five percent) of the Contract Price.

7.2. The performance bond shall be submitted by CONTRACTOR to TELKOM within 7
     (seven) calendar days before signing of this Contract, address to:

     PT Telekomunikasi Indonesia, Tbk.
     Att. Senior Manager of Finance
     TELKOM LONG DISTANCE DIVISION
     Jalan Japati No. 1, 2nd Floor
     Bandung 40133

7.3. The performance bond shall be released by TELKOM to CONTRACTOR after the
     issuance of BAST-I.

7.4. In the event CONTRACTOR fails to accomplish the Works or its parts in
     accordance with the terms and conditions of this Contract, due to gross
     negligence and/or willful misconduct of CONTRACTOR, then CONTRACTOR and
     TELKOM shall meet to review the situation. If the CONTRACTOR failed to make
     good such default, then TELKOM is entitled to forfeit the performance bond
     with prior written consent from CONTRCATOR which shall become property of
     TELKOM.

7.5. The release of peformance bond as described in Article 7.4 above, no waive
     of CONTRACTOR's obligation as described in Articles 22.1 of this Contract.

7.6. In the event of suspension of the Contract as set forth in Article 31.7,
     the performance

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     bond shall be released by TELKOM to the CONTRACTOR. (usulan NEC) In the
     event that suspension of the Contract as set forth in Article 31.10, the
     performance bond shall be released by TELKOM to the CONTRACTOR.(the
     performance bond will just released to contractor when there is the
     termination of the contract caused of default by TELKOM). (usul dari P
     Atang)

7.7. The warranty bond shall be in form of surety bond or bank guarantee issued
     by insurance company or bank according to TELKOM's requirement mentioned in
     Article 7.1 amounting of 5% (five percent) of the Contract Price.

     The warranty bond shall be valid for five (5) years from the date of
     BAST-I.

7.8. The CONTRACTOR shall submit to TELKOM the warranty bond together with the
     invoice.

                                    ARTICLE 8
                           AUTHORIZED REPRESENTATIVES

8.1  TELKOM will appoint a project manager who shall be duly authorized to act
     on their behalf for the excution of the Project.

8.2  The CONTRACTOR, immediately after the signing of the Contract, shall duly
     appoint his Project Manager and notify TELKOM for approval thereof. The
     curriculum vitae of the CONTRACTOR's Project Manager shall be submitted to
     TELKOM together with the notification.

8.3  The CONTRACTOR's Project Manager shall be duly authorized to act on behalf
     of the CONTRACTOR with respect to any and all matters relating to the
     performance of the Contract, and he shall give full technical information
     to TELKOM. The CONTRACTOR's Project Manager shall be stationed in Indonesia
     during the period commencing not later than thirty (30) days after the
     Effective Date of the Contract and terminating after the completion of the
     CONTRACTOR's obligations under the Contract.
                                                                              11

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                             ARTICLE 9 CONTRACTOR'S
                                 RESPONSIBILITY

9.1  The CONTRACTOR shall be fully responsible to conduct desktop study,
     permits, design, develop, engineering, manufacture, supply, install, and
     test the System in accordance with all the terms and conditions contained
     in the Contract including any integration of the System and for ensuring
     that the System is fully compliant with the Contract and the CONTRACTOR
     shall not claim any additional payment nor be relieved from any obligation
     imposed on it by this Contract on grounds of any information supplied by
     TELKOM on any matter whatsoever related to this Contract. In the event the
     Goods are to interoperate with third party's equipment, TELKOM shall be
     obligated to provide the necessary interfaces of the respective third
     party's equipment.

9.2  The CONTRACTOR shall be deemed to have reviewed the Works as a whole and in
     detail and to have fully satisfied itself of the feasibility and
     practicability thereof.

9.3  In addition to the requirements for the provision of technical information
     described in the Contract, the CONTRACTOR shall, upon request, provide the
     TELKOM with such additional technical information in connection with the
     Contract as the TELKOM may reasonably require.

9.4  In case any damage, loss or injury happens to the Goods and Services, or to
     any part thereof, from any cause whatsoever, except the "excepted risks" as
     defined in Article 9.6 while the CONTRACTOR shall be responsible for the
     care thereof, the CONTRACTOR shall, at his own cost, repair and make good
     the same, so that the Works shall be in good order and condition and in
     conformity in every respect with the requirements of the Contract.

9.5  In the event of any damage, loss or injury happening from any of the
     excepted risks, the CONTRACTOR shall, if and to the extent required by
     TELKOM and subject to Article 46, repair and make good the same as
     aforesaid at the cost of each party. The CONTRACTOR shall also be liable
     for any

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     damage to the Works occasioned by him in the course of any operation
     carried out by him for the purpose of completing any outstanding Works or
     complying with his obligations according to time completion under Article
     31.

9.6  The "excepted risks" are war, hostilities (whether war be declared or not),
     invasion, act of foreign enemies, rebellion, revolution, insurrection or
     military or usurped power, civil war, or unless solely restricted to
     employees of the CONTRACTOR or of his Sub-contractors and arising from the
     conduct of the Works, riot, commotion or disorder, or use or occupation by
     TELKOM of any part of the Works, or ionizing radiations or contamination by
     radio activity from any nuclear fuel or from any nuclear waste from the
     combustion of nuclear fuel, radio-active toxic explosive, or other
     hazardous properties of any explosive, nuclear assembly or nuclear
     component thereof, pressure waves caused by aircraft or other aerial
     devices traveling at sonic or supersonic speeds, or any such operation of
     the forces of nature as an experienced CONTRACTOR could not foresee or
     reasonably make provision for or insure against all the excepted risks.

9.7  The CONTRACTOR shall not take advantage of any apparent error or omission
     in the Contract documents. In the event CONTRACTOR discovers any error or
     discrepancy, CONTRACTOR shall immediately call upon TELKOM for their
     interpretation, and such error or discrepancy shall be corrected upon the
     mutual consent between TELKOM and the CONTRACTOR.

9.8  The CONTRACTOR shall pay due attention to the Works and shall cooperate
     with TELEKOM's Project Manager, TELKOM's staffs, and further with other
     CONTRACTORs having connection with the execution of the Project.

9.9  The CONTRACTOR shall conform with Attachment-2 (Plan of Work).

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9.10 The CONTRACTOR shall attend at the CONTRACTOR's own expenses such meetings
     with the TELKOM representatives at such times as may be required by the
     TELKOM.

                                   ARTICLE 10
                            RESPONSIBILITY OF TELKOM

10.1 The duties of TELKOM's Project Manager will supervise the Works and examine
     workmanship of CONTRACTOR employed in the execution of the Works.

10.2 Any written instruction or approval given by TELKOM's Project Manager to
     the CONTRACTOR within his capacity shall refer to the Contract and bind the
     CONTRACTOR as if it had been given by TELKOM.

                                   ARTICLE 11
                                     PACKING

11.1 The CONTRACTOR shall provide such packing of the Goods as is required to
     prevent their damage or deterioration during transit to their final
     destination as indicated in the Contract. The packing shall be sufficient
     to withstand, without limitation, rough handling during transit, exposure
     to extreme temperatures, briny environment, and condensation /
     precipitation during transit and open storage. Packing case size and
     weights shall take into consideration, where appropriate, the remoteness of
     the Goods final destination and the absence of heavy handling facilities at
     all points in transit.

11.2 Any case, crate, bundle, and whatever method of packing the Goods for
     shipping and/or delivery, shall bear the following identification legibly
     and indelibly marked on at least 2 (two) external sides or places:

     PT. (Persero) Telekomunikasi Indonesia, Tbk
     Att.: TELKOM Long Distance Division

     Procurement and Installation of Capacity Expansion of Submarine Cable
     System Tanjung Pandan-Pontianak

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     CONTRACT NO.               :
     LICENSE NO.                :
     SITE                       :
     CASE NO.                   : (A/B/C)*)
     PORT OF DESTINATION        :
     INVOICE NO. & DATE         :
     NET WEIGHT                 :
     GROSS WEIGHT               :
     VOLUME                     :
     (LENGTH/WIDTH/HEIGHT)

     *)  A : Sequence No. of cases
         B : Total No. of cases in shipment
         C : Sequence No. of shipment
     The detailed address shall be given to CONTRACTOR.

11.3 The CONTRACTOR shall comply with any subsequent instruction given or
     alteration required by TELKOM pertaining to packing, marking, and
     documentation inside and outside of any pieces of shipment or delivery.

                                   ARTICLE 12
                             DELIVERY AND DOCUMENTS

12.1 Delivery of the Goods shall be made by the CONTRACTOR in accordance with
     the Contract.

12.2 All physical deliveries covered by this Project shall be accompanied by a
     consignment note, which includes:
     a. Name and registered office of CONTRACTOR;
     b. Contract number;
     c. Date of shipment and delivery;
     d. Country of Origin;
     e. Quantities included.

12.3 TELKOM shall visually inspect the Goods on delivery to the installation
     Site based on a copy of the Goods shipping documents and TELKOM's Project
     Manager shall promptly issue a Goods Delivery Certificate if there is no
     obvious physical damage to the Goods and the quantity of Goods delivered is
     correct according to the supporting documentation provided.

12.4 For the purpose of the Contract, "FOB", "CIF" and "DDP" used to describe
     the obligations of the Parties shall have the

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     meanings assigned to them in the current edition of the International Rules
     for the Interpretation of the Trade Terms published by the International
     Chamber of Commerce, Paris, and commonly referred to as INCOTERMS 2000.

                                   ARTICLE 13
                       TRANSPORTATION AND STORAGE OF GOODS

13.1 Partial shipment is acceptable, but transshipment is not allowed. The word
     "transshipment" assigned herein means that the Goods shipped on board of
     the ocean vessel at the port of origin are transferred to another ship at a
     port of the country of origin or a port in any third country before they
     reach the port of the country of final destination. The CONTRACTOR is
     encouraged, to the extent practicable and reasonable, to utilize Indonesian
     Flag carrier vessels. In the event transshipment is urgently required by
     CONTRACTOR, then approval for transshipment shall be obtained by CONTRACTOR
     from TELKOM prior to transhipment.

13.2 The Goods delivered to Site shall be stored in the CONTRACTOR's storage
     area until actually required for incorporation of the Works. The CONTRACTOR
     shall be responsible for the safety of the Goods during storage. The
     CONTRACTOR shall be aware of the high humidity and its effects to Goods
     subject to corrosion in storage areas in Indonesia.

13.3 The CONTRACTOR shall be responsible for the handling and safe movement of
     the Goods during off-loading from and loading into transport, until the
     completion of the Contract.

13.4 The CONTRACTOR shall be responsible for the payment of all expenses for
     clearing the Goods through the port of arrival, for transportation to Site
     and storage.

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                                   ARTICLE 14
                                    INSURANCE

14.1 Without limiting its obligations and responsibilities, the CONTRACTOR
     shall, prior to the commencement of any Work, and at its own expense,
     provide evidence within seven (7) calendar days from the signing of the
     Contract, insurance to cover its liabilities throughout the Contract and in
     the joint name of TELKOM and the CONTRACTOR as the insured:

a.   (i) the Works and any work in progress of every kind required for the
     execution, testing and completion of the Works including, but not limited
     to, the completed item to the full value of such Works and any work in
     progress executed from time to time.
     (ii) all appliances, instruments or things of whatsoever nature required in
     or pertaining to the execution, testing and completion of the Works,
     constructional plant, the materials and other things brought on to the Site
     by the CONTRACTOR to the full value of such constructional plant, materials
     and other things, against all losses or damages from whatever cause in
     respect of all risks including, but not limited to, marine cargo (Note 1),
     sea bed (Note 2) and war risk (Note 3) arising for which it is responsible
     under the terms of the Contract and in such manner that TELKOM and the
     CONTRACTOR are covered during the period of construction of the Works;

b.   against any damage, loss or injury which may occur to any property
     (including that of TELKOM) or to any person (including any employee of
     TELKOM) as a result of the execution of the Works or temporary work;

c.   against any damage or compensation payable under statute or at law in
     respect or in consequence of any accident or injury to any person in the
     employment of the CONTRACTOR or any Sub-contractor. The CONTRACTOR shall
     indemnify and keep indemnified TELKOM against all such damages,
     compensation, claims, demands, proceedings, costs, charges and

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     expenses, whatsoever in respect thereof at its own expenses;

d.   a general liability policy, sufficient to cover its liability under the
     Contract until the end of the warranty period or any extension thereto.

The total prices contained in total amount of Contract shall include any premium
amounts paid or to be paid by the CONTRACTOR for the insurance coverage
hereinabove stated.

Note 1 Marine cargo or equivalent coverage is required to protect against all
       risks of physical loss or damage to the cable, repeaters, terminal
       station equipment and other equipment to be included in the System (other
       than war risks) beginning with the date when each such equipment is ready
       for shipping and ending when the terminal station equipment is delivered
       to the terminal stations.

Note 2 Sea bed or equivalent coverage is required to protect against all risks
       of physical loss or damage to the equipment described in Note 1 above
       (other than war risks) from the time coverage under Note 1 above ends
       until the issuance of the Certificate of System Acceptance.

Note 3 War risks or equivalent coverage is required to protect against damage
       to, seizure by and/or destruction of the System by means of war, piracy,
       takings at sea, other warlike operations and "excepted risks" as stated
       in Article 9.6 until the issuance of the System Acceptance Certificate.

14.2 Upon the issuance of each policy relative to such insurance and not later
     than fifteen (15) calendar days prior to each renewal thereof, the
     CONTRACTOR shall furnish TELKOM with evidence acceptable to TELKOM

                                                                              18

<PAGE>

     including but not limited to a copy of the insurance policy and insurance
     certificate, evidence that the relevant premiums have been paid and that
     the said policy is and will continue to be in full force, and an
     undertaking letter from the insurance company that the provisions included
     above in Article 14.1 are in effect.

14.3 For all insurance to be effected, the CONTRACTOR is encouraged, to the
     extent practicable and reasonable, to use an Indonesian government
     insurance company.

14.4 The insurance shall be effected, wherever applicable, in such a manner that
     TELKOM and the CONTRACTOR are covered:

     a.   for the period specified in Article 31 of this Contract.

     b.   during the warranty period for any loss or damage arising from a cause
          occurring prior to the commencement of the warranty period, and

     c.   for any loss or damage occasioned by the CONTRACTOR in the course of
          any operation carried out by him for the purpose of complying with his
          obligations under Article 29.

14.5 If the CONTRACTOR shall fail to effect and keep in force the insurance
     specified herein, TELKOM may effect and keep in force any such insurance
     and pay such premium or premiums as may be necessary and from time to time
     deduct the amount so paid by TELKOM from any money due or which may become
     due to the CONTRACTOR, or recover the same as a debt due from the
     CONTRACTOR. The CONTRACTOR shall be liable to TELKOM for the full
     consequences of his failure to insure under this Contract.

14.6 The CONTRACTOR shall furnish TELKOM with a copy of any insurance policy to
     be effected under the Contract upon TELKOM's request. The CONTRACTOR shall
     further furnish TELKOM with draft copies of his proposed contracts of
     insurance immediately after the receipt of notification of award and

                                                                              19

<PAGE>

      formal copies immediately after such insurance come into effect.

14.7  Unless otherwise specifically agreed upon by the Parties, it shall be the
      responsibility of the CONTRACTOR to notify the insurance company, and
      proceed with all claims arising from any damage or loss of the Goods and
      Works covered by the insurance on behalf of and for TELKOM.

14.8  All money received under the insurance policy either by the CONTRACTOR or
      by TELKOM shall be applied towards the replacement or repair of the Goods
      and/or the Works found missing or damaged. The CONTRACTOR shall be
      responsible for replacement or repairing of the items within the
      settlement.

14.9  The CONTRACTOR shall indemnify TELKOM against all claims, losses,
      expenses, etc. arising out of or resulting from any default by the
      CONTRACTOR in complying with the requirements of this Article.

14.10 Marine Insurance.

      Marine Insurance of the Goods shall be effected in the name of CONTRACTOR
      from "warehouse to warehouse" on "All Risks" basis including war risks and
      strike Articles.

14.11 Local Transportation Insurance.

      For Goods supplied from within Indonesia, insurance for local
      transportation shall be effected in the name of CONTRACTOR in a full
      amount of the ex-factory value of the Goods from the place where the Goods
      are shipped to a designated Site.

14.12 CONTRACTOR's All Risks Insurance.

      CONTRACTOR's All Risks Insurance shall be effected prior to commencement
      of the Works in the name of CONTRACTOR to cover all risks other than the
      excepted risks as mentioned in Article 9.6 of during the execution of the
      Works against physical loss of or damage to all Goods and Works to the
      full value until the issue of System Acceptance

                                                                              20
<PAGE>

      Certificate, as security for repairment of the Work.

14.13 Third Party Liability Insurance

      Third party liability insurance shall be effected prior to commencement of
      the Works to insure against the CONTRACTOR's liability for any material or
      physical damage, loss or injury which may occur to any property, including
      that of TELKOM or to any person, including any employee of TELKOM, by or
      arising out of the execution of the Works or in the carrying out of the
      Contract.

14.14 Workmen's Compensation Insurance

      Prior to commencement of the Works, the CONTRACTOR shall effect and shall
      maintain during the period of Contract, Workmen's compensation insurance
      for all personnel employed by him and the people who work with CONTRACTOR,
      in connection with the Works, as security for compensation benefits
      pursuant to the applicable laws of Indonesia against the Works related to
      injury or employer's liability.

                                   ARTICLE 15
                                TRANSFER OF TITLE

15.1  The transfer of title of the System from CONTRACTOR to TELKOM shall take
      place when the System Acceptance Certificate has been issued by TELKOM.
      The transfer of title shall not absolve or release the CONTRACTOR from its
      obligations and its liabilities under the Contract.

15.2  Upon transfer of title of the System to TELKOM, the CONTRACTOR warrants
      that the System is free from valid liens, claims, charges, encumbrances
      and security interests arising by and through the CONTRACTOR and/or under
      its government's rules and regulations.

15.3  The transfer of title from CONTRACTOR to TELKOM shall take place when
      System Acceptance Certificate has been issued by TELKOM and commencing the
      CONTRACTOR's responsibility for the

                                                                              21
<PAGE>

     Warranty obligation as mentioned in Article 29.

15.4 Upon the transfer of title of the System to TELKOM as described in Article
     15.3, the CONTRACTOR also warrants that the System has fulfilled all
     statutory requirements and permits including but not limited to any
     governmental, non-governmental and crossing permits, with respect to the
     performance of the Works.

                                   ARTICLE 16
                         FAMILIARITY WITH SITE AND WORKS

16.1 The CONTRACTOR shall be deemed to have familiarized himself with the nature
     of Site of the Works, the general and local conditions and regulations of
     Site and all other matters which can in any way affect the Works and Time
     of Completion under the Contract.

16.2 The CONTRACTOR shall be deemed to have satisfied himself at the time of
     Contract as to the correctness and sufficiency of his price stated in the
     price schedule which shall cover all his obligations under the Contract for
     proper performance, completion and maintenance of the Works. It is entirely
     the CONTRACTOR's responsibility for any errors in the computation or
     summation of the price schedule or for any incorrect perception of the
     Scope of Works and for the quality of the System to be attained at the
     completion of the Project. TELKOM will not compensate the CONTRACTOR for
     any financial loss, or for any errors discovered after the bid submission
     or during the execution of the Contract.

16.3 The CONTRACTOR shall, by careful examination, satisfy himself in respect of
     all pertinent conditions which may in any manner affect the execution of
     the Works, such as, but not limited to, the nature and location of the
     Works to be performed, the character, quality and quantity of the Goods to
     be delivered, the CONTRACTOR's facilities including the construction
     equipment to be used, labor condition, transportation conditions and
     general and local laws and regulations. The

                                                                              22

<PAGE>

     CONTRACTOR will ensure that any allowance for all the foregoing factors and
     all other risks, conditions or other circumstances has been included in the
     Contract Price. No claim shall be considered for extra costs or extensions
     of time due to any difference between the actual conditions and those which
     may have been anticipated by the CONTRACTOR.

                                   ARTICLE 17
                         SITE SURVEY AND DESIGN/DRAWING

17.1 The CONTRACTOR shall at his own expense conduct Site survey to perform all
     CONTRACTOR's obligations in this Project, review the plans furnished by
     TELKOM and prepare the installation designs/ drawings and Bill of Quantity.

17.2 The installation designs/drawings shall be prepared with due consideration
     of economic and quality aspect of the System, fully reflecting the Site
     conditions.

17.3 Survey reports and installation designs/drawings shall be submitted to
     TELKOM for approval, section by section where applicable, within such time
     as specified in Attachment-7 (Technical Specification).

17.4 TELKOM's approval of survey reports and installation designs/ drawings
     shall not relieve the CONTRACTOR of any of his obligation under the
     Contract.

17.5 If, during the execution of the Works, modification of the CONTRACTOR's
     installation designs / drawings becomes necessary, the CONTRACTOR shall
     notify TELKOM of his finding at the Site and obtain approval for such
     modifications from TELKOM. Any modifications of designs/ drawings shall be
     made without extra costs to TELKOM.

17.6 Except for the CONTRACTOR's own reason, any increase or decrease of the
     Contract Price, occasioned by variation in quantities of the Goods
     installed and the Works performed based on modification of

                                                                              23

<PAGE>

     designs / drawings approved or instructed by TELKOM, shall be equitably
     adjusted as mentioned in Article 37.

17.7 CONTRACTOR shall prepare the detailed design and the installation drawings
     for all the System and facilities based on the Technical Specifications and
     site survery result.

     Such design and installation drawings shall be submitted to TELKOM's
     Project Manager at least one (1) month after Design Review Meeting.

     TELKOM's Project Manager shall give CONTRACTOR approval for such design and
     installation drawings within fourteen (14) calendar days after the
     submission.

17.8 If TELKOM's Project Manager requires to modify such design and installation
     drawings after approval pursuant to Article 17.7 above, CONTRACTOR shall
     submit to TELKOM's Project Manager modification application by clarifying
     its scope. Such modification can be made only when it approved in writing
     by TELKOM's Project Manager. Both of increase or decrease of the Contract
     Price due to such modification shall be followed by the Contract amendment.

                                   ARTICLE 18
                           PERMITS AND AUTHORIZATIONS

18.1 The CONTRACTOR shall be responsible to obtain permits and authorizations
     from the government and or the third parties when deemed to be necessary
     for the execution and finishing the Works.

18.2 TELKOM shall assist the CONTRACTOR, sub-contractor(s) and their
     non-Indonesian personnel in obtaining in Indonesia residence/work permits
     by issuing sponsorship letters. For this purpose, list of expatriate
     personnel assigned to Indonesia on a full time basis, shall be submitted to
     TELKOM within 30 (thirty) days prior to their arrival in Indonesia. Such
     list shall

                                                                              24

<PAGE>

     include the names of each person, passport number, intended assignment and
     responsibilities, and should be accompanied by curriculum vitae and
     certificates of graduation (final education).

18.3 TELKOM shall assist the CONTRACTOR in obtaining permits and authorizations
     from the government and municipal authorities for entry into occupation and
     excavation of the property of a third party for the execution of the Works
     therein upon the CONTRACTOR's request.

18.4 At least kind of permits shall be obtained by TELKOM and the CONTRACTOR
     respectively as stated in Attachment-10 (Permit Matrix).

                                   ARTICLE 19
                 PROVISION OF FACILITIES AND LABOR BY CONTRACTOR

19.1 Unless otherwise specially defined, the CONTRACTOR shall, at his own
     expense, provide Construction Equipment, test equipment, test programs,
     materials, tools, labor, water, drainage, fuel, oil, electricity,
     utilities, transportation, and all other facilities and services, and
     safety measures, as well as any temporary sheds, platforms, offices,
     warehouse, guard posts, and other structures necessary for proper execution
     of the Contract.

19.2 The CONTRACTOR shall be responsible for proper fencing (if necessary),
     guarding, lighting and watching of all Works on Site until the Works have
     been completed and accepted by TELKOM.


19.3 The CONTRACTOR shall also be responsible for the proper provision of
     temporary roadways, and guards, safety signs for the accommodation,
     protection and safety of the owners and occupiers of adjacent properties,
     the public and others.

19.4 The facilities and labor provided by the CONTRACTOR specified in Articles
     19.1 and 19.2 above shall comply with the Technical Specification, and
     relevant laws, ordinances and regulations in Indonesia and shall be subject
     to the approval of TELKOM.

                                                                              25

<PAGE>
                                   ARTICLE 20
                        COPERATION WITH OTHER CONTRACTORS

20.1 The CONTRACTOR shall conduct his Services so as not to interfere with, or
     hinder, the progress or completion of the works being performed by other
     contractor(s) involved in the execution of this or any other project.

20.2 The CONTRACTOR shall cooperate with other contractor(s) concerned with
     Project, and in case of any dispute, the matter shall be referred to and
     settled among TELKOM, the CONTRACTOR and other contractor(s).

20.3 The CONTRACTOR shall, as far as possible, arrange his Works and place and
     dispose of the Goods being used, so as not interfere with the installation
     and/ or the operation of other contractors. The CONTRACTOR shall execute
     the Services in an acceptable manner and coordinate with other contractors.

                                   ARTICLE 21
                             PROTECTION OF EXISTING
                            TELECOMMUNICATION SYSTEMS

21.1 During the implementation of Project period, the CONTRACTOR shall pay
     special attention to protect the continuity of the operation of the
     existing telecommunication systems.

21.2 In the event that any damage should occur, due to the execution of the
     Works, the CONTRACTOR shall be responsible for the costs incurred for the
     repairs of such damage. The CONTRACTOR shall not be liable to any
     consequential, incidental or indirect damages. The CONTRACTOR's maximum
     aggregate liability, whether in tort, contract or otherwise, shall be
     limited to one hundred (100) percent of the Contract Price.

21.3 In the event that the CONTRACTOR fails or refuses to incur the costs
     thereof, TELKOM shall, without prejudice to its other remedies under the
     Contract, deduct the cost of such damage from payment to the CONTRACTOR.

                                                                              26

<PAGE>

                                   ARTICLE 22
                         DAMAGE TO PERSONS AND PROPERTY

22.1 This Article applies to all claims, losses, expenses and damages for:

     a.   injuries to or death of any persons; and

     b.   damage to property, other than the System;

     which result directly from the activities of the CONTRACTOR, its
     Sub-contractors, or agents in the execution of the Contract.

22.2 The CONTRACTOR shall be liable for all claims, losses, expenses, and
     damages described in Article 22.1 above, and shall indemnify and save the
     TELKOM harmless from all such claims, losses, expenses and damages.

22.3 TELKOM shall :

     a.   provide immediate written notice to the CONTRACTOR of all such claims
          and suits;

     b.   permit the CONTRACTOR to assume the sole defense of and to settle such
          claims or suits, and shall, upon the CONTRACTOR's request and at the
          CONTRACTOR's expense, furnish all information and reasonable
          assistance to assist the CONTRACTOR in the defense or settlement of
          the same.

22.4 The CONTRACTOR shall be responsible for the costs of clean-up and other
     costs resulting from environmental damage which results directly from the
     activities of the CONTRACTOR, its Sub-contractors or agents in the
     execution of the Contract.

                                                                              27

<PAGE>

                                   ARTICLE 23
                          ACCIDENT OR INJURY TO WORKMEN

TELKOM shall not be liable for any damage or compensation payable at law in
respect to or in consequence of any accident or injury to any workman or other
person in the employment of the CONTRACTOR or any Sub-contractor, except an
accident or injury resulting from any act or default of TELKOM. The CONTRACTOR
shall indemnify and keep indemnified TELKOM against all such damages and
compensation, except as aforesaid, and against all claims, proceedings, costs,
charges and expenses whatsoever in respect thereof or in relation thereto.

                                   ARTICLE 24
                                   WORKMANSHIP

24.1 No work shall be covered up or put of view without the approval of TELKOM
     and the CONTRACTOR shall afford full opportunity for TELKOM to examine and
     measure any work which is about to be covered up or put out of view and to
     examine in the reasonable time before permanent work is placed thereon. The
     CONTRACTOR shall give due notice to TELKOM whenever any such work ready for
     examination and TELKOM shall, without unreasonable delay, unless he
     considers it unnecessary and advises the CONTRACTOR accordingly, attend for
     the purpose of examining and measuring such work.

24.2 Any part of the Works found not to be in compliance with the Contract shall
     be promptly reconstructed accordingly by the CONTRACTOR at his own expense.
     No extension of Time of Completion and no additional cost shall be made in
     connection therewith.

                                                                              28

<PAGE>

                                   ARTICLE 25
                             MONTHLY PROGRESS REPORT

25.1 The CONTRACTOR shall submit progress report in 10 (ten) copies to TELKOM's
     Project Manager within the first five (5) calendar days of the following
     month. The first report is to be issued at the second month from the
     Effective Date of Contract.

25.2 Progress report shall describe the progress of the Works by proving and
     evidencing objectively the amount of the Works completed in the months
     concerned. The CONTRACTOR's special attention shall be directed to
     preparation of progress report in such manner and such form that TELKOM can
     easily examine and confirm the amount of the Goods supplied / installed and
     the Works performed.

25.3 Progress Report shall cover the following items:

     a.   Total progress for the last 2 (two) months and at the end of the
          months;

     b.   Goods supplied/ installed and Work completed measured in terms of
          value for each Site and each for the months concerned and as of the
          end of the months;

     c.   The CONTRACTOR's manpower mobilization for the months concerned;

     d.   Major problems encountered;

     e.   Anticipated Works for the following 4 (four) months;

     f.   Inventory report;

     g.   Undelivered Goods and shipment schedule;

     h.   Pertinent information which TELKOM may request, and

     i.   Payment Schedule, in which the CONTRACTOR shall estimate the receipt
          of payment from TELKOM for the entire period of the Contract,

                                                                              29

<PAGE>

          including the latest status of the amount already received. The form
          of payment schedules will be furnished by TELKOM to the CONTRACTOR.
          Payment schedule shall be updated by every new progress report to be
          issued.

     The CONTRACTOR shall submit the format of progress report to TELKOM for its
     approval within 30 (thirty) days after the Effective Date of the Contract.

                                   ARTICLE 26
                                   CLEANING-UP

26.1 The CONTRACTOR shall at all times pay due attention to sanitation at Site
     and keep the Site free from accumulation of waste materials or rubbish
     caused by his Works.

26.2 At the completion of the Works the CONTRACTOR shall remove all the surplus
     materials and rubbish from Site as well as his Construction Equipment, and
     waste materials, within such time as designated by TELKOM's Project
     Manager.

                                   ARTICLE 27
                              INSPECTION AND TESTS

27.1 Inspection and Test of the Goods

     a.   TELKOM or the Inspector shall have the right to inspect and/ or test
          the Goods in order to confirm their conformity to the Contract.

     b.   The inspections and tests may be conducted on the premises of the
          CONTRACTOR or its Sub-contractor(s), at the point of delivery and/ or
          at Site.

     c.   When conducted on the premises of the CONTRACTOR or its
          Sub-contractor(s), all reasonable facilities and assistance, including
          access to drawings and production data, shall be furnished to the
          Inspector(s) at no charge to TELKOM.

     d.   Should any inspected or tested Goods fail to conform to the
          specifications, TELKOM must reject them and the CONTRACTOR shall
          replace the rejected Goods to meet the requirements

                                                                              30

<PAGE>

          in the specifications, at no charge to TELKOM.

     e.   TELKOM's right to inspect, test and where necessary, replaced Goods
          after the Goods arrival at Site shall not be limited or waived by
          reason of the Goods having previously been inspected, tested and
          passed by TELKOM or the Inspector prior to the Goods shipment from the
          country of origin.

27.2 Interim Inspections and Testing of Works

     a.   TELKOM shall be entitled to request the CONTRACTOR at any time when
          deemed necessary during the execution of the Contract, to carry out
          inspections and tests of the Works so far constructed/installed in the
          reasonable time.

     b.   The CONTRACTOR shall provide such assistance, instruments, machines,
          and labor as are normally and reasonably required for examining,
          measuring and testing the Works and the quality of any Goods
          incorporated in the Works at no additional cost to TELKOM.

     c.   Should any portion of the Works or Goods incorporated in the Works
          fail to conform to the Technical Specifications after the Site
          Inspections/ Tests, TELKOM must reject them and the CONTRACTOR shall
          immediately repair, replace and/or correct such unsatisfactory
          portion(s) at its own cost.

27.3 ACCEPTANCE TEST OF WORKS. Within one (1) month before the conducted
     Acceptance Test, CONTRACTOR shall submit the detail item and test procedure
     for TELKOM's approval. Acceptance Test shall be carried out after the
     System is commissioned by CONTRACTOR and is ready for Acceptance Test.
     CONTRACTOR shall carry out Acceptance Test over the whole Works as referred
     to in this Contract, at the Site of

                                                                              31

<PAGE>

     installation in accordance with Acceptance Test schedule which shall be
     submitted by CONTRACTOR to TELKOM.

     For the purpose of such Acceptance Test above, whereby the System shall be
     integrated with TELKOM's Existing System, then TELKOM shall make available
     such TELKOM's Existing System and ready to interoperate with the System
     within seven (7) days after Acceptance Test schedule as CONTRACTOR's
     notification letter pursuant to Article 27.4. In the event TELKOM's
     Existing System is not ready to interoperate with System within seven (7)
     days after such Acceptance Test schedule, such Acceptance Test shall be
     suspended. CONTRACTOR shall carry out such integration at the time when
     TELKOM's Existing System is to be available and ready to interoperate as
     required in this Contract.

     The Acceptance Test shall be carried out in the presence of both Parties'
     authorized representatives.

27.4 Prior Notice to Acceptance Test. CONTRACTOR shall give notification to
     TELKOM within fourteen (14) calendar days prior to the date of the
     Acceptance Test. Within seven (7) working days after receipt of such
     notification, TELKOM shall notify CONTRACTOR of its approval for such
     Acceptance Test schedule or TELKOM may propose another Acceptance Test
     schedule which shall not be later than seven (7) calendar days after
     CONTRACTOR's proposed date, with remain to pay attention to completion date
     of Works according to this Contract.

27.5 Acceptance Test Implementation. After installation and commissioning for
     the System has been completed by CONTRACTOR, the Acceptance Test shall be
     carried out and the result stated in the Acceptance Test Certificate (BAUT)
     shall be submited to TELKOM's Project Manager for the purpose of the
     issuance of BAST-I.

27.6 Error rectification obligations. Should there be any non-compliance with
     the Technical

                                                                              32

<PAGE>
       Specifications (hereinafter referred to as "Error") during Acceptance
       Test period, TELKOM and CONTRACTOR shall record such Error in writing and
       CONTRACTOR shall start to rectify such Error according to Acceptance Test
       requirements.

27.7   Major Remaining Errors. If the result on Acceptance Test indicates System
       which is not operable commercially, or causes damage or loss of data or
       software, or causes corrupted data (hereinafter referred to as "Major
       Remaining Errors"), then CONTRACTOR shall notify TELKOM in writing (a) to
       stop the Acceptance Test or (b) to extend the Acceptance Test period. In
       case of (a) above, after the Error has been rectified, CONTRACTOR shall
       notify TELKOM at least seven (7) calendar days before conducting
       re-testing.

27.8   Minor Remaining Errors. If Acceptance Test result indicates the System
       shall cause failures other than Major Remaining Errors that do not affect
       the System to normal operation, TELKOM can commercially operate the
       System. The minor items shall be documented and CONTRACTOR shall rectify
       such Errors within two (2) months from the issuance of BAST-I or subject
       to such Error.

27.9   Checking on Acceptance Test Report. Upon the completion of such tests as
       referred to in this Article and CONTRACTOR has submitted reports on the
       System, and any other requirements have been made available in accordance
       with the provisions of this Contract, TELKOM shall check all such reports
       of CONTRACTOR. In the event any part of function is not in compliance
       with Technical Specifications under this Contract or incomplete, TELKOM
       shall notify CONTRACTOR in writing within seven (7) calendar days from
       the presentation by CONTRACTOR of said reports.

27.10  Cost for Corrections. All costs incurred in connection with corrections
       as referred to in

                                                                              33

<PAGE>

      this Article shall become the full responsibility of CONTRACTOR.

27.11 The issuance of First Hand-Over Certificate (BAST-I); The issuance of the
      BAST-I for the System by TELKOM, if CONTRACTOR has been fulfilled his
      obligations and requirements under this Contract whit the following
      conditions:

      a.   The acceptance result (BAUT) indicate that the System has been tested
           and is functioning properly in accordance to this Contract without
           any major pending items and accepted by TELKOM, furthermore TELKOM's
           Project Manager will issue BAST-I for the System within seven (7)
           calendar days after issuance of BAUT.

      b.   In the event TELKOM has put the System commercially operated before
           BAST-I is issued, then the System shall be deemed to be accepted and
           the BAST-I shall be issued by TELKOM.

      c.   The issuance of BAST-I by TELKOM shall not be withheld due to Minor
           Remaining Errors by taking into consideration that (i) such
           deficiency shall not affect to commercially operation by TELKOM and
           maintenance activities of the System under this Contract (ii) such
           deficiency will be put as an attachment to the BAST-I in order for
           CONTRACTOR to rectify in accordance with Article 27.8

27.12 BAST-2 shall be issued based on System basis by TELKOM's Project Manager,
      five (5) years after the date of BAST-I provided that CONTRACTOR has
      fulfilled the following conditions:

      a.   all remaining errors have been rectified and reported;
      b.   all warranty obligations have been fulfilled;
      c.   as-built drawing has been completed and submitted.

                                                                              34

<PAGE>

                                   ARTICLE 28
                                  CERTIFICATES

28.1 Factory Test Certificate.

     After the witnessing of factory tests by the Inspector (if any) has been
     satisfactorily completed, the Inspector shall issue a "Factory Test
     Certificate for Goods" which is signed by both Parties. Inspector shall
     state whether or not the test results were satisfactory and the date on
     which the witnessing of the factory tests were completed, as well as the
     particulars of the Goods inspected and tested. Six (6) copies of such a
     certificate shall be delivered to the CONTRACTOR within fourteen (14) days
     after the CONTRACTOR has submitted to the Inspector the tests data for
     factory tests witnessed by the Inspector.

     In the event that TELKOM finds it is impossible to dispatch the Inspector
     to witness a factory test after having received advanced notice of a
     factory test from the CONTRACTOR within a period agreed by both parties,
     TELKOM shall notify the CONTRACTOR in writing to such effect and upon
     notification from TELKOM, the CONTRACTOR shall carry out the factory test
     without the Inspector's attendance. The CONTRACTOR shall prepare the
     certificate itself and shall guarantee that the result of the test is
     within the Technical Specification.

     TELKOM shall accept the test certificate as though it were a certificate
     issued by the Inspector.

28.2 Goods Arrival Certificate

     Upon the arrival all of the Goods at a Site, Inspector shall make a visual
     inspection tests to determine if the Goods are the same and correct in the
     description of items and quantities, referred to in the shipping/ delivery
     documents furnished by the CONTRACTOR.

     In order that TELKOM may make a timely inspection of the Goods delivered to
     Site, the CONTRACTOR shall notify TELKOM of

                                                                              35
<PAGE>

     the type and quantity of such Goods at least fourteen (14) calendar days
     prior to their delivery.

     TELKOM upon a satisfactory result of their inspection and all of the Goods
     has been completely delivered within fourteen (14) calendar days thereof,
     Inspector shall issue to the CONTRACTOR a Goods Arrival Certificate of the
     Goods which is counter signed by Parties.

28.3 Final Acceptance Certificate / BAST-II

     a.   At the end of the five (5) year warranty period and after the
          satisfactory completion of the Acceptance Test of the System, defined
          in Attachment-7 (Technical Specification), and provided that the
          CONTRACTOR has fulfilled its obligations under the Contract, TELKOM's
          Project Manager shall issue a Final Acceptance Certificate.

     b.   The Final Acceptance Certificate will not apply to those parts which
          may have been replaced during the warranty period or to those parts
          having been the subject of an extension of warranty according to the
          provisions of Article 29.2 hereof.

     c.   The issuance of Final Acceptance Certificate shall not be unreasonably
          withheld or delayed, but in the event that a pattern of failure or
          pattern of degradation develops that is likely to cause the System to
          fail to meet the requirements of the Contract or such other
          performance levels agreed upon by the TELKOM over the twenty-five (25)
          years design life of the System, final acceptance may be withheld
          until it can be demonstrated to the satisfaction of the TELKOM that no
          pattern of failure or pattern of degradation shall have developed that
          is likely to cause the TELKOM to fail to meet the requirements of
          Attachment-7 (Technical Specification), and/or CONTRACTOR's system
          description over the twenty-five (25) years design life. In such
          event, the

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<PAGE>

          validity of the letter of performance security provided for under
          Article 7 shall remain in force until the Final Acceptance Certificate
          is issued.

     d.   At the discretion of the TELKOM with pursuant to Article 28.4 the
          final acceptance tests programme may consist of a repetition of a part
          or the whole of the tests of the System Acceptance test program.

                                   ARTICLE 29
                                    WARRANTY

29.1 The CONTRACTOR shall warrant that the Goods supplied under the Contract are
     new, unused, of the most recent or current models and incorporate all
     recent improvements in design and materials and that all Works performed by
     him shall be perfect in materials and workmanship. The CONTRACTOR shall
     further warrant that the Goods supplied and the Works performed under this
     Contract shall have no defect arising from design, materials or workmanship
     or from any act or omission of the CONTRACTOR, which may develop during
     normal use of the Goods supplied and the Works performed in the conditions
     existing at Site.

29.2 The CONTRACTOR shall provide warranty for the System as follows:

     a.   The warranty period for the Marine Portion of the System or shall
          remain valid for five (5) years commencing from the respective date of
          the System Acceptance Certificates.

     b.   The CONTRACTOR warrants that the System, including its spares, shall
          conform fully, over the twenty-five (25) years design life, to the
          requirements of the Contract or such other performance levels agreed
          upon as acceptable by TELKOM and that no pattern of failure or pattern
          of degradation shall have developed that is likely to cause the System
          to fail to meet the requirements of Attachment-7 (Technical
          Specification) over the twenty-five (25) years design life.

                                                                              37

<PAGE>

29.3 TELKOM shall promptly notify the CONTRACTOR in writing of any claims
     arising under this warranty. Upon receipt of such notice, the CONTRACTOR
     shall :

     a.   perform any repair required to restore the System to the requirements
          of the Contract or such other performance levels agreed upon by
          TELKOM, if the System should fail to meet such requirements at any
          time during the warranty period or has developed a pattern of failure
          or pattern of degradation that is likely to cause the System to fail
          to meet such requirements. However, TELKOM may elect, at their sole
          option, to make repairs, including at sea repairs which are covered by
          the warranty. Any equipment discovered to be defective or faulty and
          recovered during a warranty repair shall be returned to the CONTRACTOR
          at TELKOM's request and at TELKOM's expense. The CONTRACTOR shall
          reimburse TELKOM for the cost of such repairs within twenty one (21)
          days from receipt of a relevant notice issued by TELKOM. The
          CONTRACTOR shall be entitled to have a representative during repair
          execution to observe the System defective or faulty recovered. Such
          repairs by TELKOM shall not in any way diminish the CONTRACTOR's
          obligations under the warranty.

     b.   bear the total cost of each repair required during the warranty
          period. This cost shall include but not limited to the components,
          equipment or materials requiring replacement, the cost of any
          additional equipment necessary to effect the repair, the cost of
          making the repair, the cost of labor and engineering assistance or
          development required to make the repair and all associated costs such
          as but not limited to shipping and customs and services that may be
          required to make the repair.

                                                                              38

<PAGE>

29.4 The warranty period of items not accepted, provided or requiring repair or
     replacement at the System acceptance date shall start from the date(s) such
     items are accepted by TELKOM. Any defective part repaired or replaced
     during the warranty period shall itself be subject to a further warranty
     period of five (5) years from the date of repair or replacement.

29.5 If during the warranty period defects are found on repeated occasions in
     any part or parts of the System or if a pattern of failure or pattern of
     degradation is likely to cause any part or parts to fail to meet the
     specified requirements over the twenty-five (25) years design life, such
     part or parts shall not be repaired but shall be replaced by new part(s) at
     the request of TELKOM, including all the appropriate spares.

     a.   For the purpose of this Article, a pattern of failure or pattern of
          degradation shall be deemed to exist if:

          1)   TELKOM have notified the CONTRACTOR that in their reasonable
               opinion failures of the same or similar mechanisms have occurred
               which show a deterioration of System performance that will render
               the System outside its specification during its design life, and

          2)   The CONTRACTOR, having carried out an investigation, cannot
               demonstrate to the reasonable satisfaction of TELKOM that:

               (1)  the failures/deteriorations are within the predictions of
                    the reliability model or Mean-Time-Between-Failure (MTBF)
                    figures;

               (2)  the failures/deteriorations are not due to a design defect
                    in the component or its application; or

               (3)  the failures/deteriorations only apply to a limited number

                                                                              39

<PAGE>

                    of parts, for example, as the result of a manufacturing (or
                    batch related) inconsistency.

     b.   The investigation into the cause of any failures/deteriorations and
          any associated remedial action shall be carried out by the CONTRACTOR
          within a reasonable time-scale with regular progress reports as
          requested by TELKOM.

29.6 In addition, the CONTRACTOR shall pay to TELKOM all actual expenses (if
     any) incurred by TELKOM in testing or examining any part of the System for
     the purpose of or in connection with this Article or in connection with
     making good, replacing or repairing any part of the System.

29.7 The CONTRACTOR shall make every reasonable effort to minimize the period of
     time that the System is out of service for repair and testing. For failures
     or any situations which cause or risk to cause an outage of the System, the
     CONTRACTOR undertakes to initiate a corrective intervention immediately but
     in any case no later than two (2) days after reception of a notice from
     TELKOM. TELKOM reserve the right to determine the timing of rectification.

29.8 The CONTRACTOR shall effect all repairs of the System through the use of
     repair materials supplied by it. However, the CONTRACTOR with the agreement
     of TELKOM, may use the materials needed to effect a repair from TELKOM's
     available spare materials, components or equipment. The CONTRACTOR shall
     replace such material supplied from TELKOM's spare stock at a time mutually
     agreed by TELKOM and the CONTRACTOR. All materials supplied to replenish
     TELKOM's spare and all materials used to repair the System, which are not
     supplied from TELKOM's spare materials, shall be warranted for a period of
     five (5) years for from the date of replacement.

29.9 The repair or replacement of any faulty unit or equipment includes the
     delivery to

                                                                              40
<PAGE>

     TELKOM with a descriptive report of the fault found and, when appropriate,
     of the repair carried out on such faulty unit or equipment. The maximum
     period for repair of the units or equipment (including shipping and customs
     clearance) is defined in Attachment-7 (Technical Specification).

     a.

                                   ARTICLE 30
                                LONG TERM SUPPORT

30.1 For a period of twenty-five (25) years starting on the date of System
     Acceptance Certificate, the CONTRACTOR shall supply to the TELKOM :

     a.   technical support and advice in respect of the design, maintenance and
          operation of the System.

     b.   supplies, replacement equipment, repair service and software support
          to the System at a reasonable price.

30.2 Where identical parts or components cannot be supplied the CONTRACTOR shall
     provide equivalent and compatible parts, and shall be responsible for any
     adaptive engineering work and all implementation documentation that may be
     necessary.

30.3 Notwithstanding Article 30.2, if for any reason the CONTRACTOR intends to
     cease manufacturing identical or fully compatible spare parts and
     replacement equipment, the CONTRACTOR shall give a minimum of one (1) year
     prior written notice to TELKOM to allow TELKOM to order from the CONTRACTOR
     any required spare parts and replacement equipment and shall forthwith
     provide full details of the equivalents. However, the CONTRACTOR shall not
     cease to manufacture such parts and equipment before the expiration of the
     warranty period, as described in Article 29.

                                                                              41

<PAGE>

                                   ARTICLE 31
                               TIME OF COMPLETION

31.1 The Works shall be completed within time of completion assigned for each
     Site as indicated in Plan of Work. Completion of the Works is signified at
     the date of issuance of System Acceptance Certificate.

31.2 The entire Works under the Contract shall be completed within two hundred
     twenty six (226) days from EDC, as follows:

31.3 Within thirty (30) calendar days from the Effective Date of the Contract,
     the CONTRACTOR shall give TELKOM a detailed Plan of Work (PoW) showing the
     accepted milestones of each Site.

31.4 The PoW shall be indicated in the form of a bar chart and Critical Path
     Method (CPM) showing:

     a.   the dates of readiness for factory test and shipping;

     b.   the dates of beginning and completing of Site Survey and DRM;


     c.   the dates of beginning and completion of installations at the Sites,
          and

     d.   The dates of readiness for System Acceptance Test.

31.5 The CONTRACTOR shall provide an updated schedule every two (2) months
     showing progress. The PoW to be updated shall not relieve the CONTRACTOR's
     obligations to complete the Works in time.

31.6 The CONTRACTOR shall strictly observe the project implementation in
     accordance with Time of Completion as mentioned in Article 31.

31.7 In the evnet of occurrence of failures in TELKOM's Exisiting Network which
     prevents or disable the CONTRACTOR from

                                                                              42

<PAGE>

     carrying out the Works, the CONTRACTOR may suspend performance of related
     Works which shall be mutually agreed in writing by TELKOM and the
     CONTRACTOR.

31.8 If, as a result of such suspension of Works, the CONTRACTOR incurs
     additional costs, or suffers loss in the discharge of its responsibilities
     under the Contract, then the CONTRACTOR shall be allowed to recover an
     amount equal to the costs and/or losses from TELKOM, provided that:

          a.   such costs or losses could not have been reasonably prevented by
               the CONTRACTOR, and;

          b.   the CONTRACTOR submits a detailed claim for such costs or losses,
               supported by sufficient evidence to enable it to be validated
               within two (2) months of the date of occurrence, and

          c.   the suspension was not caused by the default or negligence of the
               CONTRACTOR.

                                                                              43

<PAGE>

Usulan dari NEC

3.9   The CONTRACTOR shall be allowed an equitable extension of Time of
       Completion for performance of any suspended Work as may be mutually
       agreed, provided that the suspension was not caused by the default or
       negligence of the CONTRACTOR.


31.10  If the suspension under Article 31.7 continues for a total of one hundred
       eighty (180) days, TELKOM and the CONTRACTOR will discuss possibility of
       termination or any other arrangement. If the both Parties agree to
       terminate the Contract, the Contract will be terminated on the date
       agreed between the Parties.

                                   ARTICLE 32
                                   SPARE PARTS

32.1   During the warranty period, all parts that are required to be replaced,
       shall be supplied by CONTRACTOR without charge to TELKOM if such
       replacement is due to imperfect workmanship, faulty design or faulty
       material supplied by the CONTRACTOR, or any act, neglect or omission on
       the CONTRACTOR's part or unless such errors or non-compliance have been
       cause by TELKOM or third party(ies).

32.2   CONTRACTOR shall provide prices and suppliers (local or overseas)
       information, regarding spare parts, and suggest the number of spare to be
       purchased and stocked for the successful maintenance of the System.

32.3   CONTRACTOR shall provide a list of spare part including description and
       quantity as appropriate by TELKOM.

32.4   CONTRACTOR shall agree to supply the spare parts to TELKOM and TELKOM
       shall have the right to purchase these spare parts from CONTRACTOR for
       TELKOM's maintenance requirements at a price to be agreed upon. The spare
       parts or suitable equivalents with the same performance should be
       available throughout the design

                                                                              44

<PAGE>

      lifetime of the System.

32.5  The CONTRACTOR shall guarantee that any additional Goods as well as spares
      shall be supplied any time for a period of five (5) years from the date of
      the Final Acceptance Certificate of Contract (BAST-2).

32.6  The CONTRACTOR shall carry out sufficient inventories to assure ex-stock
      supply of consumable spares for TELKOM

                                   ARTICLE 33
                          TOOLS AND MEASURING EQUIPMENT

33.1  The CONTRACTOR shall provide tools and measuring equipment with
      instruction manuals required for maintenance and operation of the
      completed Works in accordance with the Bill of Quantity. The tools and
      measuring equipment are detailed in the Technical Specification. Tools and
      measuring equipment which provided under this Contract which shall be
      handed over to TELKOM are new and original.

33.2. For the installation and/or construction activities purpose, the
      CONTRACTOR shall provide all necessaries tools and measuring equipment by
      themselves.

                                   ARTICLE 34
                                 TERM OF PAYMENT

34.1  The terms of payment of this Works under this Contract will be made by
      TELKOM to CONTRACTOR as follows:

      1)  Payment will be made 100% of Contract Price after the BAST-I issued by
          TELKOM indicating that the System has successfully been completed and
          can properly be put into commercially operation.

      2)  In the event of suspension of the Contract as set forth in Article
          31.7, TELKOM shall pay the Contractor a) the price for completed Works
          based on Appendix-1 (Price Summary and Bill of Quantity) upon such
          suspension.

Usulan NEC
      3)   CONTRACTOR shall submit

                                                                              45

<PAGE>

          completed and valid invoice in three (3) original copies to TELKOM
          that consist of the following document :

          1.   Original of BAST-I;
          2.   Copy of Acceptance Test Certificate (BAUT);
          3.   Copy of insurance policy for Goods and Services pursuant to
               Article 14.6 for the first payment;
          4.   Original of warranty bond;
          5.   Copy of valid performance bond;
          6.   Copy of cerificate of origin from Chamber of Commerce of origin
               country.
          7.   Tax invoice following the applicable Indonesian regulation.
          8.   Invoice and simple receipt in duplicated;
          9.   Cover letter.

34.2 Payment for Dollar US portion shall be made by TELKOM in Indonesian Rupiah
     currency (IDR) with conversion of middle rate of Bank Indonesia at the time
     of the payment, while invoicing shall be in US Dollar and Indonesian Rupiah
     Currency (IDR) under this Contract.

34.3 Period of Payment
     Each of payment shall be made within thirty (30) calendar days after
     receipt of complete, valid and correct documents by TELKOM.

34.4 Address of invoicing.
     Any invoices and related documents under this Contract shall be submitted
     to the following addresses:
     TO:  PT Telekomunikasi Indonesia,Tbk
     Att. Senior Manager of Finance
     LONG DISTANCE DIVISION
     Jalan Japati No.1, 2nd Floor
     Bandung 40133

34.5 The payment shall be made by TELKOM to CONTRACTOR though direct transfer
     which addressed to :

     Bank                : CitiBank Jakarta Branch
     Address             : Jl.Jendral Sudirman

                                                                              46
<PAGE>

                           Kav.3-4 Jakarta - 10220
     Account No.         : (to be advised)

     In favour of NEC CORPORATION and transfer fee shall be responsibility of
     CONTRACTOR.

                                   ARTICLE 35
                                 CONTRACT PRICE

35.1 The Contract Price for execution of this Contract is USD XXXXXX(Said XXXX).

35.2 The details are specified in Article 35.1 as mentioned in Attachment-1
     (Price Summary and Bill of Quantity) of this Contract.

35.2 No further costs. Contract Price set forth in the breakdown of price as
     mentioned in Attachment-1 (Price Summary and Bill of Quantity) of this
     Contract shall cover the entirety of parts which are required for the
     implementation of the Works in accordance with this Contract, save to the
     extent any additional or reduced Works as required by TELKOM in writing as
     referred to in Article 37 and Article 38 with respect to addition or
     reduction of the Works under this Contract.

35.3 The total Contract Price shall include VAT currently at 10%, income tax,
     other payable taxes, duties, levies and fees in accordance whith the
     prevailing laws and regulation that may be imposed or levied in connection
     with the execution of the Contract.

35.4 Unit prices quoted in Attachment 1 (Price Summary and Bill of Quantity) are
     firm fixed prices and shall not be varied except new item not defined in
     such attachment.

                                                                              47
<PAGE>
                                   ARTICLE 36
                            TAXES, LEVIES AND DUTIES

36.1    Taxes and Importation. All taxes (excluding VAT), stamp duty and other
        duties in accordance with the Government regulations shall be the
        responsibility of the CONTRACTOR Any withholding tax shall be deducted
        directly by TELKOM from the payment to be made to CONTRACTOR in
        accordance with the prevailing laws which is applicable to this
        CONTRACTOR, (except the VAT shall be paid by TELKOM to CONTRACTOR to be
        paid to Indonesian Government).

36.2    All the Goods under this Contract shall be conducted under CIF as
        referred to in Incoterm 2000. Therefore, it is agreed by the Parties
        hereto that : (i) TELKOM shall be the importer; and (ii) CONTRACTOR
        shall be responsible for and carry out importation and custom clearance;
        (iii) All the costs of material import to Indonesia including storage,
        penalty, if any shall be the responsibility of the CONTRACTOR.
        If TELKOM's import license will not be available then the Parties will
        discuss and settle this matter.

36.3    Additional devices. In the event CONTRACTOR shall require additional
        devices, apparatus or any other tools in carrying out the Works which
        shall be obtained by means of importing them from abroad, then all
        costs, taxes, retribution and any other levies thereof shall become the
        responsibility of CONTRACTOR.

36.4    CONTRACTOR shall be responsible at its own cost, for obtaining in a
        timely fashion all necessary export permits, licenses and approvals from
        the country of origin and any intermediate locations, including the
        payment of any and all levies for freight handling and other costs
        related to such permits, licenses and approvals.

36.5    Irregularities to importation procedures. CONTRACTOR shall be fully
        responsible for the occurrence of irregularities to either the delivery
        of Goods from country of origin, transport procedures or supporting
        import documents, as set forth in the

                                                                              48
<PAGE>
        Presidential Instruction Number 3 of 1991 dated 25th July 1991 or any
        replacement regulations thereof, if any.

                                   ARTICLE 37
                                 CONTRACT CHANGE

37.1    TELKOM may at any time, by a written order given to the CONTRACTOR
        pursuant to Article 35, make any change to the provisions of the
        Contract as may be considered necessary during the execution of the
        Works in any one or more of the following:

        a.  Volumes and quantities of the Goods to be supplied and the
            Services to be performed by the CONTRACTOR, and

        b.  Plan of Work.

37.2    If any change causes an increase or decrease of cost and any part of the
        Works under the Contract, an equitable adjustment shall be made in the
        Contract Price and/or Plan of Work upon mutual agreement by the Parties
        hereto.

37.3    TELKOM shall instruct the CONTRACTOR to provide the change or vary the
        Works, with the consent in writing. Such change on the Contract Price
        will be determined as follows:

        a.  if the variations concern only quantities of equipment or services
            for which a unit price or rate is indicated in Attachment-1
            (Price Summary and Bill of Quantity), the unit price or rate as the
            case may be shall be applied.

        b.  if the subject of the variations is not covered by a unit price or
            rate in Price Schedule, the CONTRACTOR and TELKOM shall mutualy
            agree on such new unit price proposed by CONTRACTOR.

37.4    If such variation effect to any part of the Works or Contract Price, an
        equitable adjustment shall be made upon mutual agreement by the Parties
        hereto.

                                                                              49
<PAGE>
37.5    Any changed in respect of the Contract shall only be recognized or
        acceded to when that has been agreed in writing by the TELKOM prior to
        implementation of the Contract changed by the CONTRACTOR. The
        implementation of such change may be executed by CONTRACTOR in parallel
        after having approval from TELKOM's Project Manager or after signing of
        the Contract Amendment pursuant to Article 38 by both Parties.

37.6    TELKOM shall not be liable for any additional work unless it is recorded
        in Contract Change. If the CONTRACTOR proceeds without such written
        authorization, it shall be deemed a waiver by the CONTRACTOR of any and
        all claims for additional payments.

                                   ARTICLE 38
                               CONTRACT AMENDMENTS

Any variation in or modification of the terms of the Contract including but not
limited to Contract Price during the execution of the Contract shall be subject
to Contract amendment in writing agreed by the Parties hereto

                                   ARTICLE 39
                                   ASSIGNMENT

The CONTRACTOR shall not assign, in whole or in part, its obligations to perform
of Works under the Contract, except with TELKOM's prior written consent.

                                   ARTICLE 40
                                 SUB-CONTRACTORS

40.1    Prior to the appointment of Sub-contractors, the CONTRACTOR shall notify
        TELKOM in writing of such intended appointments and shall obtain
        TELKOM's written approval.

40.2    The CONTRACTOR's notification of Sub-contractors and subsequent TELKOM's
        approval thereof shall not release the CONTRACTOR from any liability or
        obligation under the Contract.

                                                                              50


<PAGE>
                                   ARTICLE 41
                         DELAYS IN THE WORKS PERFORMANCE

41.1    Subject to Articles 31.7, 37 and 38 the CONTRACTOR shall complete the
        supply and installation of the System by the Time of Completion as
        specified in Article 31.

41.2    If the execution of the Works shall be delayed by reason of any event of
        force majeure, without the default or negligence on the part of the
        CONTRACTOR and pursuant to Article 41.3, the CONTRACTOR may be granted
        such extension of Time of Completion as shall be mutually agreed,
        without any financial claim from the CONTRACTOR to TELKOM.

41.3    In connection with Article 41.2 and provided that the CONTRACTOR proves
        that:

        a.  there is insufficient contingency time indicated in Plan of Work
            to cover any delay, and;

        b.  such delay or any duration of such delays could not be avoided by
            use of alternative resources, and ;

        c.  such delay could not be avoided even after reasonable endeavors
            have been attempted to mitigate the impact on Time of Completion;

        d.  such extension of Time of Completion will only be considered if the
            CONTRACTOR notifies TELKOM of the cause of delay within fourteen
            (14) calendar days of commencement of the delay and provides to
            TELKOM, either on completion of the Works or at an appropriate stage
            in the Works, satisfactory evidence of the effects of the delay.

41.4    If the System is not completed in accordance with Article 31 or by the
        end of the period of extension agreed upon under Article 38, the
        CONTRACTOR shall pay to the TELKOM by way of liquidated damages pursuant
        to Article 42.

                                                                              51
<PAGE>
                                   ARTICLE 42
                               LIQUIDATED DAMAGES

42.1.   Liquidated Damages Amount. For any delay in the Time of Completion
        pursuant to Article 31 and Attachment-2 (Plan of Work), TELKOM shall be
        entitled for liquidated damages from CONTRACTOR amounting of 1 0/00 (one
        per mil) of the Contract Price excluding 10% VAT for each day delay for
        a maximum ten percent (10%) of the Contract Price.

42.2.   The sum or sums of liquidated damages as a result of delay pursuant to
        Article 42.1 above will be deducted from amount of CONTRACTOR's invoice
        which is not yet paid by TELKOM without prejudice to TELKOM's right of
        termination under Article 43 of this Contract.

                                   ARTICLE 43
                             TERMINATION FOR DEFAULT

43.1    TELKOM may terminate the Contract in whole or in part, if the following
        conditions are occured :

        a.  if the CONTRACTOR fails to deliver any or all of the Goods or fails
            to perform any or all of the Works within Time of Completion
            specified in Article 31, or any extension thereof granted by TELKOM
            pursuant to Article 38, or;

        b.  if the CONTRACTOR is in material breach of any of provisions of the
            Contract

        c.  if the CONTRACTOR do not take any action within thirty (30) calendar
            days since the Effective Date of Contract;

        d.  if the CONTRACTOR delay up to fifty (50) calendar days from the
            agreed Time of Completion as describe in Article 31 without any
            writing from CONTRACTOR pursuant to Article 41.2.

        TELKOM shall give notice in writing to the CONTRACTOR to make good the
        default

                                                                              52
<PAGE>
before TELKOM terminate the Contract. If the CONTRACTOR fails to make good the
default within thirty (30) calendar days from the date of notice was given, then
TELKOM may terminate the Contract. This condition does not apply to Article
43.1.c.

43.2    If the Contract shall be terminated due to the above reasons Article
        43.1 then TELKOM have the right to forfeiture the performance bond which
        will be proprietary of TELKOM.

43.3    In the event TELKOM terminates the Contract in whole or in part,
        pursuant to Article 43.1. TELKOM may procure, upon such terms and in
        such manner as it deems appropriate, the Goods similar to those
        undelivered and the Works unperformed, and the CONTRACTOR shall be
        liable to TELKOM for any excess costs for such similar Goods and Works.
        However, the CONTRACTOR shall continue performance of the Contract to
        the extent not terminated.

                                   ARTICLE 44
                                  FORCE MAJEURE

44.1    Notwithstanding the provisions of Articles 41, 42, and 43.1, the
        CONTRACTOR shall not be liable for forfeiture of its performance bond,
        liquidated damages or termination for default, if and to the extent
        that, its delay in performance or other failure to perform its
        obligations under the Contract is the result of an event of force
        majeure.

44.2    For purposes of this Article, "Force Majeure" means an event having
        occurred in Indonesia which is beyond the control of the CONTRACTOR and
        not involving the seeable cause. Such events may the Government of
        Indonesia in its sovereign or capacity, fire, flood, earthquake,
        landslide, epidemics, freight embargoes, war, hostilities (whether war
        be declared or not), invasion, act of foreign enemies, the nuclear and
        pressure wave risk described in Article 9.6. or in so far as it relates
        to Indonesia in which the Goods are being and are to be supplied and the
        Works are being and are to be executed or maintained, rebellion,
        revolution, insurrection, military or usurped power, civil war, or
        unless solely restricted to the

                                                                              53

<PAGE>
        employees of the CONTRACTOR or of his Sub-contractors and arising from
        the conduct of the Works, riot, commotion or disorder.

44.3    If the force majeure occurred outside Indonesia, TELKOM may consider to
        extend of Time of Completion without any additional cost to TELKOM,
        provided that the CONTRACTOR shall proves with a letter statement issued
        by Authorized Institution related country which related to event of
        force majeure.

44.4    If a Force Majeure situation arises, the CONTRACTOR shall promptly
        notify TELKOM in writing of such condition and the cause thereof. The
        Contract may be amended or its duration extended or terminated wholly or
        partly by mutual agreement of Parties.

44.5    In the event of force majeure, the CONTRACTOR shall be entitled to
        suspension of the execution of the Contract for the period such force
        majeure and its consequences will last. However, the CONTRACTOR shall
        seek all reasonable alternative means to continue its obligations for
        the Contract area(s) not affected by the force majeure event.

44.6    In case of the suspension of the Works caused by the force majeure
        event, the CONTRACTOR shall properly protect and secure the Works during
        such suspension period. If such protection and securing of the Works is
        deemed impracticable, the matter shall be notified by the CONTRACTOR to
        TELKOM in writing by clarifying the reason and shall be settled through
        negotiation between both Parties hereto.

44.7    Should the suspension as specified in Article 44.5. have continued for a
        period exceeding 6 (six) months, either of the Parties hereto shall be
        entitled to terminate the Contract with respect to the remaining Works
        and shall give notice of termination by registered mail or any
        alternative means to the other Party.

44.8    In the case of such termination, TELKOM

                                                                              54

<PAGE>
        shall pay to the CONTRACTOR the value of the Goods forwarded to the Site
        in Indonesia and the cost of the Works executed prior to the
        termination. For all the expenses to be made by the CONTRACTOR for the
        termination of the Contract, equitable solution shall be made through
        negotiation by both Parties hereto.

                                   ARTICLE 45
                           TERMINATION FOR INSOLVENCY

TELKOM may, at any time, terminate the Contract by giving a written notice to
the CONTRACTOR, without compensation to the CONTRACTOR, if the CONTRACTOR
becomes bankrupt or otherwise insolvent, provided that such termination will not
prejudice or affect any right of action or remedy which has accrued or will
accrue thereafter to TELKOM.


                                   ARTICLE 46
                           TERMINATION FOR CONVENIENCE

46.1    TELKOM, may by written notice sent to the CONTRACTOR, terminate the
        Contract, in whole or in part, at any time for its convenience. The
        notice of termination shall specify that a) termination is for TELKOM's
        convenience, b) the extent to which the CONTRACTOR's performance under
        the Contract is terminated, and c) the date upon which such termination
        becomes effective.

46.2    The Goods that are complete and ready for shipment within 30 (thirty)
        days after the CONTRACTOR's receipt of notice of termination shall be
        purchased by TELKOM at the Contract terms and prices. For the remaining
        Goods, TELKOM may elect:

        a.  to have any portion completed and delivered at the Contract terms
            and Price, and/ or;

        b.  to cancel the remainder and pay to the CONTRACTOR an agreed amount
            for partially completed Goods and for materials, equipment, and
            parts previously procured by the CONTRACTOR.

                                                                              55
<PAGE>
        c.  for the Works that have been executed prior to effectiveness of
            notice of termination, TELKOM shall pay to the CONTRACTOR for all
            reasonable costs incurred in such execution of the Works, in due
            consideration of the sum already paid to the CONTRACTOR.

                                   ARTICLE 47
                             RESOLUTION OF DISPUTES

47.1    TELKOM and CONTRACTOR shall make every effort to resolve amicably by
        direct informal negotiation any disagreement or dispute arising between
        them under or in connection with the Contract. For this purpose, TELKOM
        and the CONTRACTOR shall establish Dispute Review Panel as mentioned in
        Article 47.2 of this Contract.

47.2    If after thirty (30) days from the commencement of such informal
        negotiations, TELKOM and the CONTRACTOR have been unable to resolve
        amicably a Contract dispute, either Party may require that the dispute
        be referred for resolution to the formal mechanisms specified herein.
        These mechanisms may include, but are not restricted to, conciliation
        mediated by a third party, adjudication in an agreed national
        arbitration, Indonesian National Board Arbitration (Badan Arbitrase
        Nasional Indonesia) in accordance with the laws of Indonesia.

47.3    The Parties hereto agree decision of BANI shall be final and binding
        upon them and therefore no other legal appeal may be permitted to any
        court of competence. Upon decision of BANI aforesaid, all terms and
        conditions of this Contract shall remain valid and the respective
        Parties' obligations shall be completed until such dispute is declared
        to be settled.

47.4    The costs incurred by the Dispute Review Panel for the first two members
        in the performance of its duties and responsibilities shall be borne
        respectively by TELKOM and the CONTRACTOR, and for the third member
        equally by TELKOM and the

                                                                              56

<PAGE>
        CONTRACTOR.

                                   ARTICLE 48
                         LANGUAGE AND MEASUREMENT SYSTEM

The Contract shall be written in the English and Indonesian languages and shall
be indicated in metric units of measurements system. The Indonesian version of
the Contract shall prevail in case of difference in interpretation between the
English version and the Indonesian version. All correspondence and other
documents pertaining to the Contract which are exchanged by the parties shall be
written in Indonesia or English.


                                   ARTICLE 49
                       APPLICABLE LAWS AND COMPLIANCE WITH
                       STATUTES, REGULATIONS, AND BY-LAWS

49.1    The Contract shall be interpreted in accordance with the laws of
        Republic of Indonesia.

49.2    The CONTRACTOR shall, in all matters arising in the performance of the
        Contract, conform in all respects with the provisions of national or
        state statutes, ordinances or other laws or any regulations or by-laws
        of any local or other duly constituted authority that shall be
        applicable to the Works, and shall keep TELKOM indemnified against all
        penalties and liabilities of any kind for breach of any such satutes,
        ordinances or laws, regulations or by-laws.

49.3    TELKOM assumes that the CONTRACTOR has thoroughly informed himself about
        such laws and regulations, and the CONTRACTOR shall be responsible for
        the observance of the same.

49.4    Should there occur in Indonesia, subsequent to the date of this
        Contract, any change to the provisions of national or state statute,
        ordinance or other law or any regulation or by-law of any local or other
        duly constituted authority, or the introduction of any such national
        statute or others which causes an increase or decrease of the Contract
        Price and/or substantial effects in the Time of Completion in the
        CONTRACTOR's performance under the Contract, such

                                                                              57
<PAGE>
        increase or decrease of the Contract Price and/or Time of Completion
        shall equitably adjusted by mutual agreement between the Parties.

                                   ARTICLE 50
                                     NOTICES

50.1    Any notice given by one party to the other pursuant to the Contract
        shall be sent in writing and shall be addressed to TELKOM and the
        CONTRACTOR as follows :

        a.  TELKOM
            ------
            Project Manager for Capacity Expansion of Tanjung Pandan --
            Pontianak Submarine Cable System

            PT TELEKOMUNIKASI INDONESIA Tbk. Head of Long Distance Division
            Graha Citra Caraka, Lantai M Jalan Gatot Subroto Kav 52 Jakarta -
            12710, Indonesia

            Phone No. : (021) 5221400
            Fax No.   : (021) 5274300

            CC : Director of Network Business

        b.  CONTRACTOR
            ----------
            Project Manager for Capcity Expansion of Tanjung Pandan -- Pontianak
            submarine cable system. (Contractor Representative)


            Submarine Networks Division
            Shin-Tamachi Building, 34-6, Shiba 5-chome, Minato-ku, Tokyo
            108-0014, Japan

            Phone  No. : +81-3-3798-6749
            Fax No.    : +81-3-3798-9117

50.2    A notice shall be effective when delivered and signed acknowledge
        receipt or on the notice's effective date, whichever is later.

                                                                              58
<PAGE>
                                   ARTICLE 51
                             CONTRACTOR'S PERSONNEL

51.1    Employees of CONTRACTOR for the execution of the Works under this
        Contract shall, at all times, be identified and recognized as the
        employees of CONTRACTOR under his administrative control, and shall at
        no time be identified as employees of TELKOM.

51.2    CONTRACTOR shall obtain and furnish necessary security clearance,
        personnel passports, visas and other documents for personnel performing
        services under this Contract.

51.3    At all times covered by this Contract, CONTRACTOR shall exercise
        complete control over his employees.

51.4    CONTRACTOR and his employees shall conform to all applicable local laws,
        regulations and ordinances, and shall promptly correct any violations
        brought to his attention.

51.5    CONTRACTOR shall be responsible for the professional and technical
        competence of his employees and try his best to select and employ only
        those persons who in his judgment will be reliable and competent and who
        will comply with local laws and customs and conform to a high standard
        of moral and ethical conducts.

51.6    CONTRACTOR shall agree upon written request from TELKOM's Project
        Manager after discussion with CONTRACTOR, to terminate the employment of
        any of his employees performing the work under this Contract, if
        TELKOM's Project Manager considers that such termination is necessary to
        protect the interest of TELKOM and/or the Government of Indonesia.

51.7    CONTRACTOR shall bear all expenses necessary for such termination of
        employment and shall provide personal for replacement, at his own
        expense.

51.8    CONTRACTOR shall utilize as many local personnel as possible, and
        CONTRACTOR's expatriate personnel shall be limited only to engineers,
        specialized technicians and

                                                                              59
<PAGE>
        administrative personnel who are not available in Indonesia.

                                   ARTICLE 52
                             USE OF LOCAL PERSONNEL

The CONTRACTOR is encouraged, to the extent practicable and reasonable, to
employ staff and labor with the required qualifications and experience from
sources within Indonesia.

                                   ARTICLE 53
                                SOFTWARE LICENSE

53.1    Subject to the terms and conditions in this Contract, CONTRACTOR grants
        to TELKOM the non-exclusive, non-transferable and non-sublicensable
        license to use the software solely on the Goods and at the Sites except
        as otherwise expressly agreed in writing between the Parties and to use
        the software documentation for such aforementioned purpose.

53.2    TELKOM shall be entitled to produce back-up copy of each item of the
        software, respectively, whereby the use of such back-up copy shall be
        limited to replace the original software, if the original software is
        inoperable. TELKOM shall keep records about the storage of such back-up
        copies and present such records to CONTRACTOR upon request.

53.3    TELKOM acknowledges and agrees that the software and the software
        documentation contain proprietary and confidential information and trade
        secrets of CONTRACTOR and its third party licensors, and agrees to keep
        and treat such software and software documentation confidential.

53.4    TELKOM shall a) not reproduce, copy, or modify the software in whole or
        in part except as authorized by CONTRACTOR in writing or as provided in
        this Section; and b) not attempt to decompile, reverse engineer,
        disassemble, reverse translate, or in any other manner decode the
        software except as specifically authorized by compulsory law.

                                                                              60
<PAGE>
                                   ARTICLE 54
                                  MISCELLANEOUS

54.1    Headings. All headings of the articles set forth in this Contract shall
        only be for convenience and therefore it shall not alter, add or affect
        certain meaning in the interpretation of this Contract.

54.2    Contactor shall make by its own costs 25 (twenty five) copies of this
        Contact to be delivered to TELKOM for the control of implementation of
        the Contract and other related activities.

54.3    In the event any of the articles of this Contract is unenforceable, then
        such article shall be deleted and shall be deemed to be of no force or
        effect. The Parties shall, to the extent possible, negotiate in good
        faith to agree upon an enforceable provision having a materially similar
        effect, and this Contract shall be amended accordingly.

54.4    In the implementation of this Contract the Parties shall consider
        business ethics as a public ethics to success and result of Project
        quality.

                                   ARTICLE 55
                        EFFECTIVE DATE OF CONTRACT (EDC)

This Contract shall be effective on the date, month and year first above
written.

IN WITHNESS WHEREOF, this Contract is made in three (3) original and executed in
Jakarta by duly representatives of the Parties hereto in view of prevailing
laws, bearing sufficient stamp duties, each of which shall be binding and having
the same legal power.

                              Signed by
                              -------------------

                             For and on behalf of:
                             ---------------------

PT TELEKOMUNIKASI INDONESIA, Tbk                        CONTRACTOR
                                                     NEC CORPORATION





         S A R W O T O                              TORU HAMANAKA
         -------------                              -------------

                                                                              61
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HEAD OF TELKOM LONG DISTANCE                            GENERAL MANAGER
                                                 SUBMARINE NETWORKS DIVISION
                                                 ---------------------------

                                                                              62