Bappenas to cancel $6-7 billion worth of projects

Padang, West Sumatra (ANTARA News) - The National Development Planning Agency (Bappenas) will cancel foreign-funded projects worth US$6-7 billion approved since 2000 as their execution had fallen short of expectations, an official said.

"The projects have not performed as expected due to slugggish fund absorption as a consequence of such problems as land disputes," Bappenas chief Paskah Suzetta said in a dialog with the rector of Padang State University (UNP), Mawardi Effendi, here on Wednesday.

Paskah, who is also state minister for national development planning, said the agency would be more selective in approving offshore loans for the financing of development projects.

He said the government was determined to combine foreign and domestic funding sources to finance development projects in the future.

"The combination of domestic and foreign funding sources is designed to avoid having to seek offshore loans such as those from multilateral and bilateral institutions that usually apply binding contracts," he said.

In 2007, the government would disburse offshore loans worth US$1.7 billion out of US$4 billion agreed to by the House of Representatives (DPR).

Some of the loans would originate from the World Bank, the Asian Development Bank and the Japan Bank of International Cooperation.