QUESTIONS ARISE OVER THE USE OF ODA MONEY IN EASTERN INDONESIA

David Adam Stott (Shingetsu Member No. 17) of The University of Kitakyushu has brought to our attention two articles on Japan’s ODA programs in eastern Indonesia, especially Sulawesi Island. We observed quite recently in Shingetsu Newsletter No. 404 that there may be some issues in regard to the quality of assistance that Japan gave to the people of al-Muthanna Province in Iraq. The Yomiuri article also raises serious questions about the use of ODA in Indonesia, which is the country that has received the most Japanese ODA of any country. It will also be recalled that Vice-President Jusuf Kalla expressed some complaints about the terms of Japanese aid earlier this year.

GOVERNMENT TO THROW MORE CASH INTO FAILED DAM
By Tatsuhito Iida, Yomiuri Shimbun
October 7, 2006

A multipurpose dam in Indonesia that was constructed with 25.1 billion yen in yen loans from Japan is filled with mud only five years after completion, and the Japanese government has offered an additional loan of about 10 billion yen to remove the mud, according to sources close to the project.

Although a bedrock collapse in an upstream area was the direct cause of the situation, the risk had been pointed out by experts before construction began. The consulting firm that conducted the prior assessment of the project was also given a contract to assess emergency measures to address the problem.

The project can be used as an example in debates to review how Japan's official development assistance can be better implemented. The dam in question, Bilibili Dam, is an hour's drive from Makassar, the largest city on Sulawesi Island. The dam's artificial lake measures about 18 square kilometers, larger than Lake Suwa in Nagano Prefecture.

The upstream part of Jeneberang River, where the dam is located, has turned brown from all the mud flowing into the water. The artificial lake was like a tidal wetland for as far as the eye could see when I visited the dam recently. Along the river, heavy machinery dredged mud from the riverbed. Even though about 30 truckloads of mud were removed every day, the foreman lamented, "This is a never-ending job." A 34-year-old local who runs a diner near the dam said: "The dam should have reserved water, but it actually accumulated mud. The people who came up with the construction plan should take responsibility."

The dam, meant to help with flood control and irrigation and supply drinking water, was completed in 1999. The construction work was done by a Japanese second-tier general contractor. In March 2004, a large-scale collapse of bedrock occurred on a mountain upstream from the river. The massive mudslide flowed into the river and reached the dam about 35 kilometers downstream.

Bilibili Dam can handle up to 29 million cubic meters of mud and sand, and was designed to be able to maintain its dam functions for 50 years after completion. However, on-site research done by the Japan International Cooperation Agency just after the collapse showed that the dam would be almost filled with mud by 2009. JICA proposed emergency efforts to cope with the problem, and the additional yen loan was approved.

JICA and the Japan Bank for International Cooperation, which was in charge of extending the loan, initially maintained that the incident could not have been predicted in the prior assessment, in answering to questions from the Yomiuri Shimbun. They said the report on the prior assessment made in 1979 said that bedrock collapses on upstream mountains were unlikely because the bedrock was hard. However, a copy of the report obtained by the Yomiuri Shimbun did not contain such descriptions. The report says: "Mountains in the waterhead area are very precipitous. In recent years, there were large-scale mudslides and a collapse of bedrock in 1965. It is possible that a huge mudslide could occur in the future. Thus, erosion control is an important task." The report was written by experts of the then Construction Ministry who visited the site.

But another report done later by a Tokyo-based consulting firm to which JICA consigned the assessment described the situation differently. That firm's report said: "The mountains are made of hard rock. Mudslides from these mountains are not a serious concern." As a result, the project was given a green light. An executive of the consulting firm said, "Though the contents might be contradictory, we were not accustomed to doing projects in foreign countries. Our report might be sketchy on details."

JBIC consigned the consulting firm to devise a plan of the emergency measures with additional aid in a discretionary contract worth 370 million yen. JICA and other concerned entities explained that even though the prior assessment was done properly, the collapse of bedrock on such a large scale could not have been predicted.

Prof. Yoshinori Murai at Sophia University, who is an expert on ODA issues and has visited the dam site, said: "It's possible that the risk of bedrock collapsing was intentionally underestimated. It's highly likely that the dam was constructed in a place where a dam should not be built. It's irrational to pour more money into the project without reexamining it first."

Yen loans are extended for long periods and at low interest rates by the Japanese government via JBIC for developing countries to improve infrastructure. As of the end of fiscal 2005, a total of 22.95 trillion yen in loans had been extended, and 11.42 trillion yen was outstanding.

In terms of recipient countries, Indonesia had received the largest amount at 4.04 trillion yen, with also the largest sum -- 2.34 trillion yen -- outstanding.

JAPAN FOCUSES ASSISTANCE ON EIGHT OF INDONESIA’S EASTERN PROVINCES
By the Antara News Agency
September 1, 2006

Makassar -- The Japanese government has focused its assistance through the Official Development Assistance (ODA) Task Force on six of Indonesia’s eastern provinces, comprising six provinces in Sulawesi and two others in Maluku.

The head of the Indonesian office of the Japan International Cooperation Agency (JICA), Nobuhiko Hanazato, disclosed here Thursday the eight provinces to be given priority consist of North Sulawesi, Central Sulawesi, Southeast Sulawesi, West Sulawesi, Gorontalo, Maluku and North Maluku. Japan’s assistance program for poverty alleviation in South Sulawesi has been implemented after the signing a memorandum of understanding between ODA Task Force and the South Sulawesi administration here in May 2006. The implementation of the poverty alleviation program supported by Japan’s assistance is under the coordination the National Development Planning Board (Bappenas).

Hanazato was visiting here in connection with the plan for the construction of the Trans-Sulawesi highway from Maros Regency to Parepare Regency in the province, which was proposed by the Public Works Ministry in 2005, and the development of the Mamminasata (Maros, Makassar, Sungguminasa, Takalar) Metropolitan Region. The development of the Mamminasata metropolitan region, including the construction of a road network, which has been underway since 2005, is part of the poverty alleviation program in South Sulawesi.