ASIA: Aust companies warned they may miss out in Aceh

AAP General News (Australia)
02-16-2005
ASIA: Aust companies warned they may miss out in Aceh

By Rob Taylor, South East Asia Correspondent

JAKARTA, Feb 16 AAP - Australian companies may miss out on lucrative reconstruction
projects in tsunami-shattered Aceh as Indonesia's government favours rival bids from Malaysia
and Singapore, an Australian analyst says.

Indonesian President Susilo Bambang Yudhoyono has promised to unveil the government's
blueprint for Aceh in the next few weeks.

The plan is expected to include the building of coastal buffer zones to guard against
future tsunamis.

It will also use zoning laws to prevent the rebuilding of houses too close to the ravaged
shoreline, while setting a five-year timeline for construction of new infrastructure.

Although Australia was one of the largest international donors of humanitarian assistance
to Indonesia with a $1 billion aid package, Indonesia expert Greg Fealy warned Australian
companies seeking involvement would face stiff competition.

Malaysia and Singapore, as members of the 10-nation regional ASEAN grouping, could
grab the largest chunk of the estimated $US4 billion ($A5.1 billion) in reconstruction
projects to be allocated through a bidding process requiring foreigners to take on Indonesian
partners, he said.

"The Indonesians may well prefer to have ASEAN neighbours doing the rebuilding, rather
than having foreign companies such as Australian companies in there," Fealy told AAP.

"Now whether the Australians would want to give money to the rebuilding effort being
done by Malaysian companies remains to be seen.

"It will be interesting to see how Australians respond to that"

Malaysian Prime Minister Abdullah Badawi and Singapore's Deputy Prime Minister Tony
Tan have contacted Yudhoyono seeking involvement in Aceh's rebuilding.

More than 234,000 Indonesians died in the province when and earthquake and killer wave
struck on Boxing Day, erasing entire villages and levelling much of the capital Banda
Aceh.

More than one million homes were destroyed, along with roads, ports, bridges, water
treatment plants, hospitals and large parts of the electricity network.

There has been speculation that Indonesia's government favours Malaysian involvement
because it wants the rebuilding to have a strongly Islamic flavour.

This would reflect Aceh's status as the so-called "verandah of Mecca" and the only
province to have fully implemented sharia law.

"All of these arguments could be used to favour companies from places like Malaysia,
rather that Australian companies," the Australian National University's Fealy warned.

A group of Malaysian businessmen met the visiting Indonesian president this week for
an hour-long discussion and said afterwards they were keen to invest in Indonesia.

Indonesia's Minister for National Planning, Sri Mulyani Indrawati last week said Australia
should have input into how its tsunami aid package was spent, but that any insistence
on making the final decisions would be counterproductive.

Australia and Indonesia will discuss the package in Canberra in March.

AAP rft/gs/evt/de

KEYWORD: QUAKE INDON REBUILD

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