Indonesia, China to provide US$800 million for infrastructure

Antara News, Tuesday, April 6, 2010 15:17 WIB

Jakarta (ANTARA News) - The Indonesian and Chinese governments will provide US$800 million to finance four toll road and bridge building projects in Indonesia by the middle of this year, a minister said.

"We have a commitment with China to implement the four projects with a `tied loan` of US$800 million," Public Works Minister Djoko Kirmanto said after attending a coordination meeting at the office of the coordinating minister for economic affairs here on Tuesday.

According to Djoko Kirmanto, the four infrastructure projects that would soon be realized were the Medan-Kualanamu tollroad in North Sumatra, the Cileunyi-Sumedang-Dawuan tollroad in West Java, the Tayan bridge in West Kalimantan, and the Teluk Kendari bridge in Southeast Sulawesi.

"We have made an agreement with China on the projects and it will be signed soon. Following the agreement, as many contractors as possible from China are expected to take part in the projects," the public works minister said.

He added the agreement on the infrastructure projects would soon be signed in the form of a memorandum of understanding (MoU) with the Chinese public works minister.

But prior to the signing of the MoU, Djoko Kirmanto said, an umbrella agreement would also be signed by the Indonesian trade minister, the Chinese government and China`s Exim Bank.

"Soon after those agreement have been signed, the projects will be started," the minister said.

According to him, the tied loan had a low interest rate and it would also be used for e-procurement while the agreement on the regulation of the entry of Chinese contractors would be adjusted with regulations at home.

Meanwhile, Coordinating Minister for Economic Affairs Hatta Rajasa expressed hope that before an integrated ASEAN system was realized, road infrastructure development to connect one region to another in Indonesia should be completed.

"Before the integrated ASEAN, all areas in Indonesia should be connected because China wants to step up its investment in Indonesia in infrastructure projects," Hatta Rajasa said.

Related Article:

China promises big investment in Indonesia