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umerous financial problems have prevented the smooth construction of the Trans-Java southern highway project, a provincial official said.

The project is meant to help bring disadvantaged areas in East Java, as well as Banten, Central and West Java and Yogyakarta, out of seclusion and attract investors to the less developed, southern part of Java.

"The slow disbursement of funds from the state budget, provincial and regency administrations; the soaring prices of construction materials and labor costs; and the increasing cost of land acquisition and clearance will likely increase project costs by some 35 percent," head of the infrastructure development section at the East Java Public Works Agency, Heri Budianto told The Jakarta Post on Monday.

"The initial estimate was Rp 3.1 trillion (US$264.05 million) but this is expected to raise to Rp 4 trillion."

Heri said the construction of the south coast highway was part of a strategy to promote the areas agricultural and maritime products and to attract foreign investors in the hopes of accelerating rural economic development and generating jobs.

Joko Purwanto, head of the highway development project, recently said that the slow pace of the work had a lot to do with administrative and topographic factors, especially around the hilly areas of Banyuwangi, Blitar and Malang regencies.

The highway project, launched by then president Megawati Soekarnoputri in 2002, streches 627 kilometers from Banyuwangi in the east through Jember, Lumajang, Malang, Ponorogo and Treggalek regencies to Pacitan regency in the west.

After six years, only 74.6 kilometeres of the highway have so far been opened. The project, one of five mega-projects initiated by former East Java Governor Imam Oetomo, is expected to be completed by 2012.

Heri said that the project has already cost some Rp 593.1 billion and that his office was still waiting for a permit from the Forestry Ministry to pave over several sections of protected forests in Blitar, Ponorogo and Trenggalek regencies.

"Regency administrations also had difficulties acquiring land because most land owners have demanded three times the base land price," he said.

"The project will use some 5.6 million square meters of forest areas belonging to state-owned forest management company PT Perhutani. Another 8 million square meters of land, earmarked for the project, currently belongs to state-owned tobacco plantations, residents and local administrations."

Meanwhile, Budiarto Tasmo, a member of Commission D on economic and development affairs of the East Java Legislature Council, slammed the central government for shifting its concentration from strategic development projects to the general election.

"If the government had strong political commitment to the strategic projects, which benefit the majority of the people, the Trans-Java southern coast highway project can be completed in 2012," he said.