ADB to provide $150 million in aid for road projects

JAKARTA (JP): The Asian Development Bank (ADB) has approved US$150 million in financial aid to Indonesia for the development and construction of new roads in its eastern provinces this year, an official says.

"We expect the aid agreement will be signed here in August," Syarifuddin Alambai, director for road development of the Ministry of Public Works, told reporters here yesterday.

"The ADB aid will be part of the $375 million in foreign funds needed to finance Indonesia's road projects this year," he said.

He said the ADB aid will be used to finance the development of 450 kilometers of existing roads and the construction of 1,000 kilometers of new roads in Irian Jaya, East and West Nusa Tenggara and North Sumatra.

He declined to give details on the terms of the aid, but said its interest rate is estimated to be between 0.75 and one percent higher than the London interbank offered rates.

Alambai said the government expect to get the remaining $225 million from the World Bank and Japan's Overseas Economic Cooperation Fund.

He said the ministry plans to construct 10,000 kilometers of roads and 198,000 meters of bridges during the Sixth Five Year Development Plan (Repelita VI) at an estimated total cost of Rp 24 trillion ($11.1 billion).

"Of the total cost, around Rp 2 trillion will be financed by provincial administrations, Rp 17 trillion by the government and Rp 5 trillion by foreign creditors," he said.

By comparison, the government spent Rp 16 trillion to develop 36,000 kilometers of roads and construct 5,300 kilometers of new roads as well as new bridges with a total length of 153,000 meters during the last five years.

Alambai said the private sector is also expected to help construct 13,000 kilometers of new roads throughout the country during the Repelita VI period, he said.

The private sector has built 17,000 kilometers of new roads in the past five years, he added. (fhp)