BRR to open bidding for projects in Aceh, Nias

Monday, April 24, 2006
By nias

Monday, April 24, 2006

Rendi Akhmad Witular, The Jakarta Post, Jakarta

The Rehabilitation and Reconstruction Agency for Aceh and Nias (BRR) plans to accelerate the bidding process for projects worth around Rp 7 trillion (some US$777 million) during the second quarter of this year.

The bidding, which will mostly consist of projects related to housing, schools and education programs, are part of the Rp 9.9 trillion in projects allocated for this year from the state budget, BRR chief Kuntoro Mangkusubroto said Sunday.

"During the first quarter, the agency has put into tender one-third of the allocated reconstruction funds," said Kuntoro after accompanying Vice President Jusuf Kalla in a meeting with the secretary-general of the Council of the European Union Javier Solana.

"We hope we can accelerate the (tender) process in order to maximize the reconstruction efforts. As you have know last year we only managed to spend 40 percent of the allocated funds for reconstruction," he added.

The funds exclude contributions from foreign donor countries or agencies, which will account for around 70 percent of reconstruction funds needed for this year.

The government expects that the reconstruction efforts in Aceh and Nias will help drive the country's economic activities this year at a time when the private sector is still facing the impact of last year's economic slowdown.

Indonesia's economy, Southeast Asia's largest, will depend heavily on government and consumer spending this year because higher interest rates and inflation are discouraging investment and are unlikely to recover until the third quarter of this year.

The BRR is constructing houses for the victims of the tsunami and earthquake in Aceh and Nias in December 2004 and March 2005 respectively, which killed more than 150,000 people. The construction work will need a huge amount of cement, steel, bricks and wood.

The agency is planning to build about 120,000 houses to shelter about 500,000 displaced persons. The project is expected to be completed by the end of 2007.

Kuntoro also said that of a total $7.1 billion pledged by donor countries and agencies only around $4.6 billion had been committed thus far, with the remaining aid pledged to be followed up by the government.

The government established the agency in April 2005, assigning it to coordinate rehabilitation efforts for a four-year period in Aceh province and Nias.

The BRR has recently changed its tendering processes to improve efficiency, amid growing donor concern over uncontested contracts, with several international donors expressing concern over the special dispensation that permits direct appointment of housing contracts, rather than tendering.

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April 2006