Australia Funds National Road Network Upgrade in Indonesia

Australia and Indonesia have taken a major step towards improving the national road network.

The Australian Government has signed an agreement for a Rp 2.3 trillion [AUD300 million] highly concessional loan with the Indonesian Ministry of Finance to assist Indonesia in improving the quality of roads and bridges in Eastern Indonesia.

The Australian Ambassador to Indonesia, Bill Farmer, said the program would improve 750 to 1000 kilometres of national roads and bridges, leading to reduced travel costs and times. Isolated communities in Eastern Indonesia will also have improved access to economic and social opportunities. This is expected to provide much-needed support for regional economic development and growth.

“Australia is working closely with the Ministry of Public Works to identify and improve those parts of the road network most in need of rehabilitation. These improvements are expected to generate real economic benefits for Indonesia,” Mr Farmer said.

“Improved roads will increase access to markets, jobs, health services and essential social and educational facilities, particularly in rural areas.”

The zero interest loan, with no associated fees or charges, will be repaid over forty years.

The loan is supported by a Rp 209 billion [AUD28 million] grant for planning and design to support the delivery of high quality engineering works.

Initial priorities for road improvement include the south and east coasts of South and South East Sulawesi, West and South Kalimantan, and Bali and NTB. Initial support will also be provided to replace bridges in North Sulawesi washed away by floods in early 2006.

Construction work is expected to commence in the first half of 2008.

Further Information:
Mia Salim (Public Affairs, AusAID) 0812 107 0237