THE AWARD OF THE PRIME CONTRACT FOR THE USG

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