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Cablegate: The Award of the Prime Contract for the Usg

VZCZCXRO3130
OO RUEHCHI RUEHDT RUEHHM
DE RUEHJA #1735/01 1731151
ZNR UUUUU ZZH
O 221151Z JUN 07
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5202
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHRC/USDA FAS WASHDC
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHKO/AMEMBASSY TOKYO 0557
RUEHHE/AMEMBASSY HELSINKI 0895
RUEHBY/AMEMBASSY CANBERRA 0846
RUEHTC/AMEMBASSY THE HAGUE 3327
RUEHSM/AMEMBASSY STOCKHOLM 2059
RUEHBS/USEU BRUSSELS
RHHMUNA/USCINCPAC HONOLULU HI
RUEAIIA/CIA WASHDC
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/JOINT STAFF WASHDC
RHEFDIA/DIA WASHDC

UNCLAS SECTION 01 OF 02 JAKARTA 001735

SIPDIS

SENSITIVE
SIPDIS

AIDAC

DEPT FOR EAP/MTS AND EB/IFD/ODF
TREASURY FOR IA Q BAUKOL
USDA FOR FAS/EC/MCHAMBLISS
NSC FOR MORROW AND MELINE
USAID FOR ANE/EAA, WARD, CHILES AND ROSEN

E.O. 12958: N/A
TAGS: EAID ECON PGOV PREL SENV KCOR ID
SUBJECT: THE AWARD OF THE PRIME CONTRACT FOR THE USG
QSIGNATUREQ HIGHWAY PROJECT IN ACEH


Summary

On June 21 the United States Agency for International
Development (USAID) announced the award of the Aceh Road
Reconstruction prime contract for its West Coast Highway to
a partnership of Ssangyong Engineering and Construction
Company, Ltd. of South Korea and PT. Hutama Karya of
Indonesia. The announcement occurred at the site of existing
construction near Banda Aceh, and was presided over by USAID
Mission Director William M. Frej in the presence of newly-
elected Aceh governor, Irwandi Yusuf. In his remarks,
Governor Irwandi was generous in his praise of this
Qsignature projectQ, the longest component of the USGQs
tsunami reconstruction program. In particular, Governor

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Irwandi stated his gratitude Qfor USAIDQs continued
commitment to remain our strategic partnerQ as the people of
Aceh rebuild. Moreover, the governor pledged to sustain Qa
solid working relationship with USAID and to provide
whatever support is necessary to achieve a quality final
product.Q The same level of gratitude was expressed by
Kuntoro Mangkusubroto, the Director of the Aceh
Reconstruction Agency (BRR), which is USAIDQs primary
counterpart in the reconstruction of Aceh. At a USAID dinner
on June 20, Director Kuntoro expressed his continuing
gratitude for USAIDQs unwavering commitment to Aceh in
general and the road project in particular. As a result of
the strong collaborative relationship between the USG and
these Aceh government entities, difficult land acquisition
issues have been resolved in record time, thereby enabling
USAID to commence with much needed reconstruction. END
SUMMARY.

ACEH RECONSTRUCTION AGENCY (BRR) EXPRESSES GRATITUDE FOR USG
SUPPORT AND HOPES FOR FUTURE

In the dinner on June 20, BRR Director Kuntoro expressed his
strong support and gratitude for all of the sustained
support from the USG. In particular, he thanked USAID for
its timely support at the creation of BRR over two years
ago, when USAID supplied critical expatriate advisors.
Second, he was thankful for the USG role in supporting BRRQs
agenda over the past two years, thereby ensuring the
completion of BRRQs mandate by April 2009. Third, he was
grateful for USAIDQs role in assisting BRR in the transition
of its assistance to the provincial government. Fourth,
Director Kuntoro was supportive of further USAID assistance,
as the priorities of the province move from reconstruction
to post-conflict social and economic reintegration. Fifth,
he expressed hope that other donors will meet the need of
secondary roads that support the USAID road, as this will
enhance prospects for sustained economic growth. Finally, he
mentioned the importance of maintenance to ensure the
sustained functioning of economic infrastructure. While the
USAID road is an example, so are the other roads, ports and
markets that are being built throughout Aceh.

NEW CONTRACT WILL ENSURE ROADQS TIMELY COMPLETION

The USAID supported Banda Aceh Q Calang road project is the
largest single project in Aceh and will help improve
communication along the west coast of Aceh Province. A
contract was signed for an amount of $108 million on June
19, 2007. This is the final contract for the completion of
all road construction. The scope of this project is
approximately 155 kilometers (approximately 96 miles) and

JAKARTA 00001735 002 OF 002


extends from Banda Aceh to the west coast city of Calang.
This construction project will take approximately 33 months
to complete, with estimated completion in early 2010.
Ssangyong is expecting to complete its mobilization and
begin construction within three months. Immediately after
the announcement of the award on June 21, 2007 by USAID
Mission Director William M. Frej, a follow up press
conference was held. There was great interest in the new
contract and significant and favorable press coverage.

The significance of this road cannot be underestimated. As
Mission Director Frej pointed out, for the people of Aceh,
this road will promote the kind of economic development that
will be key to sustaining a peaceful Aceh. As construction
expands along the route, employment opportunities will
increase for local villagers. Meanwhile, USAID contractors
are building local capacity through training in construction
and project management.

Conclusion

Governor Irwandi summarized the significance of the road
best when he concluded, Qthe West Coast Highway will stand
as a living symbol of the generous support from the American
people channeled through our friends, colleagues and
neighbors at USAID.Q The USG was one of the first countries
to respond to the immediate needs stemming from the horrific
tsunami of December 26, 2004. USAID continues to respond to

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the long-term development needs of this promising province
at the western end of the Indonesian archipelago.

Heffern

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