DENY ON THE MATTER OF PENALTY UNDER CONSTRUCTION CONTRACT

Our Ref. ST/2002/0376 August 16, 2002 Subject: Deny on the matter of penalty under construction contract. Attention: President The Stock Exchange of Thailand We, Sino-Thai Engineering and Construction Public Company Limited (STECON), would like to clarify the facts regarding the news that the Sub-Committee on Budget Allocation for Public Construction has urged the Royal Irrigation Department to claim penalty from STECON due to the negligence to conform with the contract of Bangpakong Irrigation Canal Project. To protect STECON's reputation, we would like to confirm that we did not abandon the project. The Royal Irrigation Department has notified us to temporarily halt the construction work because the Department needed to modify the construction design to best suit the altered landscape. Therefore, the allegation that the company has relinquished the project holds no truth. The Company provides this information for clarification to the Stock Exchange of Thailand and for dissemination to all market investors. Sincerely yours, Ayuporn Wongkomet Assistant Vice President - Executive Office Investor Relation IR@stecon.co.th