RI, China work on $507m projects
Rendi A. Witular, The Jakarta Post, Jakarta
The governments of Indonesia and China have agreed to jointly work on infrastructure projects in Indonesia worth US$507 million as a follow-up to the bilateral strategic partnership signed by the two nations' presidents on Monday.
The two projects are the completion of the ongoing Suramadu bridge linking Surabaya and Madura island in East Java worth $177 million and the construction of the $330 million Jatigede dam in West Java.
"During the ministerial level meeting for the strategic partnership, the Indonesian and Chinese governments agreed to invest in infrastructure projects," Minister of Public Works Djoko Kirmanto said at the State Palace on Tuesday.
Indonesia, the world's fourth most populated country, signed an agreement on strategic partnership with the world's most populated country, China, to help expand bilateral trade by 42 percent from $14 billion to some $20 billion over the next three years.
Included in the agreement is the Memorandum of Understanding (MOU) on infrastructure and natural resources cooperation.
For the initial phase, Djoko said, the Chinese involvement in developing local infrastructure projects would be by providing soft loans for the construction of the Suramadu bridge and the Jatigede dam.
The Suramadu bridge, which is expected to become the country's longest bridge, is currently being financed by the central government and the East Java administration.
The 5,438-meter-long bridge is estimated to be completed by 2006, with the loan from China expected to be disbursed this year. The bridge is primarily aimed at boosting the economy on Madura island, which has been left largely untouched by development.
"The loan from China was initially scheduled to be disbursed last year. However, it was later postponed because the Indonesian government could not meet several conditions set out by the Chinese government," said Djoko.
The conditions include the provision of funds by the Indonesian government amounting 10 percent of the project value for financing the initial construction of the bridge within one year.
Djoko, however, said that during the recent ministerial meeting, China had agreed to revise the condition by allowing Indonesia to provide only 5 percent of the funds each year for a two-year period to help finance the construction.
Aside from the Suramadu project, Djoko added, China was also eager to be involved in the planned Jatigede dam.
The dam is located in Sumedang regency -- some 130 kilometers southeast of Jakarta -- and it is expected to provide water for some 100,000 hectares of rice fields along the northern Java coast, particularly in West Java province.
The dam will address the continual problems of drought and flooding in West Java, particularly in Sumedang.