One million houses project to begin in March

Nana Rukmana, The Jakarta Post, Indramayu, West Java

The construction of one million low-cost houses will commence in March. With unemployment figures reaching nine million, expectations are high that pressure on the country's economy will be relieved.

Minister of Resettlement and Regional Infrastructure Soenarno said here the construction project, along with the building of 1,400 kilometers of highways on Java, Sumatra and Sulawesi islands, would absorb 14 million workers.

The government has allocated Rp 20 trillion (US$2.35 billion) for the projects.

"Aside from boosting development and the growth of the national economy, these labor intensive projects will employ 14 million people, 10 million of them in the construction of houses," Soenarno said.

The so-called one-million-houses project is expected to be completed by 2017. But the government remains undecided on when the highway construction projects will start, as compensation prices for the land cleared for the highways remains unsettled.

The Central Statistics Agency recorded 9.1 million people were jobless last year, around a 1 percent increase from the previous year. The government and labor observers have predicted a higher figure of unemployment, unless the country's economy can grow by at least 7 percent this year.

Manpower minister Jacob Nuwa Wea has expressed concern that if nothing is done to alleviate unemployment in the country, the problem will jeopardize the elections.

Soenarno said the one-million-houses project was part of the government's efforts to support infrastructure development in the country after many construction projects were suspended during the economic crisis.

"Therefore, there should be commitment from the new government to ensure the sustainability of the project," Soenarno said, while accompanying President Megawati Soekarnoputri's husband Taufik Kiemas on a visit here.

He added that 102 regencies across the country had signed a deal with the central government to support the project.

Of the one million low-cost houses --which will be either 28- square-meters or 36-square-meters in size -- 600,000 will accommodate people who earn less than Rp 350,000 a month.

The government will prioritize the construction of 100,000 houses in war-torn Nanggroe Aceh Darussalam this year.

Soenarno said the government would offer three types of credit scheme to applicants according to their salaries.

The Central Bank will use its excess liquidity to finance the credit schemes for the houses.

President Megawati Soekarnoputri included the major projects on her cabinet agenda in the final year of her term, which will end in October.

The government has planned to finance the highway projects together with the private sector.

The government will construct 1,000 kilometers of highways on Java island, while the rest will be on Sumatra and Sulawesi islands.

Soenarno said that financial sources and further arrangements for the implementation of the two mega projects would be discussed in the cabinet meeting this week.