Naughty Naughty Mr Westfield

ERG LIMITED 2002-09-16 ASX-SIGNAL-G

HOMEX - Perth

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We refer to Mark Westfield's article in The Weekend Australian on 14 - 15 September 2002.

In this article Mr Westfield states that:

* ERG's Chief Executive, Peter Fogarty, "had been negotiating with
the NRMA motoring association to invest around $100 million, or more,
in ERG".

* "During the discussions between Fogarty and the NRMA it appears
that the motoring group was attracted to the smart card technology
the company had developed but had little confidence in Fogarty and in
return for investing in the company would have required Fogarty to be
replaced."

* ERG "stopped paying its share" of joint venture fees in a JV with
NRMA in June implying ERG had breached payment obligations.

These statements are each incorrect. The only discussions between ERG
and NRMA over the last 12 months have related to cooperation on smart
cards. Discussions have not taken place about a "$100 million or
more" investment by NRMA in ERG.

Further, Mr Westfield refers to the Melbourne fare collection system
supplied by ERG and implies that the equipment is not working. This
is again incorrect. The equipment continues to achieve performance
levels above contractual requirements. It was only rail vending
equipment that had been attacked by vandals which was not fully
functional. That vandalism, which caused a number of problems in the
system, has been contained through cooperation with the customer and
police.

We have previously written to Mr Westfield's editor seeking
correction of errors in previous articles. Unfortunately we have not
received any response. We have, however, been provided with certain
correspondence between Mr Westfield and an ERG shareholder which
provides an insight into his position. Included in this
correspondence are comments by Mr Westfield such as the following:

"Can't say I'll be at all unhappy if the stock actually does fall
next time I write about it. Must say I'm certainly keen to do another
piece and it won't be favourable."


P J Fogarty
CHIEF EXECUTIVE