Govt spends $120m Aceh grant from Japan

Urip Hudiono, The Jakarta Post/Jakarta

The government has spent up to US$120 million in grants that the Japanese government had already disbursed to Indonesia as part of its aid for the rehabilitation and reconstruction of Aceh.

"We have spent some $120 million so far, from the total of $146 million in grants that Japan has disbursed to us," the Ministry of Finance's director general for state treasury Mulia Nasution said on Friday.

"We expect the remaining funds to be spent shortly as well, and if possible, for Japan to add to its aid funds of some $200 million for Aceh that it had pledged through the Consultative Group on Indonesia (CGI)."

Mulia said the funds were mostly used for the purchase of urgently needed health care supplies and construction materials for repairing damaged roads.

"Besides that, we plan to use the funds for the rehabilitation of damaged school buildings and community health centers (Puskesmas) in the province," he said.

Mulia further explained that the grants had been implemented as joint projects under the Japan-Indonesia Cooperation System (JICS) scheme.

"The procurement of goods and supplies using the funds was conducted by JICS officials, but Indonesia was given the freedom to propose what it needed," he said.

During the CGI annual meeting earlier this year, the Japanese government had pledged a total of $177 million in grants for Aceh, as part of the group's overall pledge of $1.2 billion in grants and $500 million in interest-free loans.

As a member of the Paris Club group of major creditor countries, Japan had also agreed to participate in the immediate waiving of $2.4 billion in debt payments for Indonesia, so the government could reallocate the funds for coping with the Aceh tsunami disaster.

Meanwhile, concerning the aid funds from other parties, Mulia explained that the Asian Development Bank had also begun disbursing and implementing its $300 million in aid grants for Aceh.

"The ADB had helped us and the Supreme Audit Agency (BPK) open our representative offices in Aceh," he said.

The World Bank, meanwhile, has also finalized its preparations to implement a multi donor trust fund for Aceh that will pool and manage some $500 million from international donors.

Public concern has recently risen over possible embezzlement of aid funds for Aceh. The government, however, has repeatedly assured donors concerning the accountability of the funds, under strict audit supervision of the BPK.