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11 May 2007
11 Japan Loan Bank Projects Delayed

The National Development Planning Agency (Bappenas) has discovered that the realization of 11 infrastructure projects funded with loans from the Japan Bank for International Cooperation has been delayed.

“The delayed projects belong to the Public Works Department, the Transportation Department, Cipta Karya and Bina Marga,” Benedictus Benny Setiawan, Director of Development Funding Monitoring and Evaluation told Tempo at his office, Jakarta, yesterday (9/5).

Benny explained that the projects were delayed because of land acquisition and project procurement.

Four projects were delayed because of land acquisition problem, Batanghari Irrigation; North Java Corridor Flyover, Tanjung Priok Access Road and Double Double-Track.

The projects which were delayed by procurement are Lower Solo River Improvement, Komering Irrigation Project, PTSL for Water Resources Development and the Railway Electrification and Double Double-Track.

The projects' procurement was hampered due to land acquisition.

The Dumai Port project was delayed by the Indonesian Military (TNI) Navy’s quay demolition.

The problem was settled in the end of 2006, but the process must be accelerated because it is likely to not to be completed on schedule.

The Maritime Education and Training Improvement project is also not in accordance with schedule due to design alterations.

The constraints resulted in the absorption of loans being low.

Benny said that not all of the loans from the Japan Bank were absorbed.

The US$5.95 billion in loans from the Japan Bank is equivalent to 40.8 percent of the total foreign loans for infrastructure projects.

Funds from Japan Bank are allocated for 51 projects.
The delay in projects and fund absorption did not make the government pay commitment fee to Japan Bank.

However, infrastructure facilities cannot be enjoyed soon by the general public and economic costs have occurred.
“Roads were ruined due to high transportation cost,s so goods' prices are also high,” said Benny.

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