Govt gets $151m loan from ADB for road projects
Govt gets $151m loan from ADB for road projects
The Jakarta Post, Jakarta
The Asian Development Bank (ADB) has approved US$151 million in
loans to Indonesia to help fund road rehabilitation projects in
Sumatra and Kalimantan.
In a media statement released on Friday, the Bank said the
fund would be spent to rehabilitate a total of 1,300 kilometers
of roads and repair -- either widen or replace altogether --
about 40 bridges.
The roads and bridges are located on the Trans-Sumatra central
and eastern corridors and include the Trans-Kalimantan highway,
which links production areas and markets through 10 provinces on
the two islands.
"By improving the condition of these high-priority
transportation links, the project will boost trade and
investment, promote regional cooperation, and improve
accessibility and living conditions in isolated areas," said
Manzoor Rehman, the project team leader, in the statement.
The roads also serve interregional trade by providing a
corridor from Indonesia to other ASEAN members through links with
Malaysia and Brunei Darussalam. The Kalimantan highway, in
particular, is a major link between Brunei, Indonesia and
Malaysia.
"As such, it will boost economic growth and improve the
welfare of the poor."
The fund, which carries a 25-year term including a grace
period of five years, will cover about 70 percent of the
project's cost, estimated at $215.8 million, with the Indonesian
government contributing about $64.8 million.
The Ministry of Public Works will be the executing agency for
the project, slated for completion in June 2010.
Assisting the improvement of Indonesia's roads since 1976, the
ADB has extended loans to the sector amounting so far to $1.57
billion for 15 projects.
Most of Indonesia's basic infrastructure, including roads, is
in bad shape, with the government -- crippled financially by the
1997-1998 economic crisis -- concentrating more on achieving
fiscal sustainability and cutting spending for such projects.
Lack of fresh investment from the private sector has only made
it worse, attributable mainly to the adverse investment and
business climate here at home.
The ADB said that the deteriorated roads have increased the
transportation costs for the agriculture, plantation, petroleum
and industrial sectors in the country, including Sumatra and
Kalimantan.
"With fiscal constraints likely to remain, external support is
critical to preserving, upgrading and developing priority links
and supporting economic recovery," said Rehman.