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ndonesia and Japan have agreed to go ahead with the US$20 billion Metropolitan Priority Area (MPA) development plan, which will include the construction of 17 transportation infrastructure projects in Greater Jakarta.

The agreement was made during the first steering meeting of the MPA development plant in Jakarta on Thursday, which was attended by Japan’s Foreign Affairs Vice Minister Makiko Kikuta and Indonesia’s Coordinating Minister for the Economy Hatta Rajasa.

During the meeting, Kikuta said that the worst ever recorded earthquake and tsunami to hit Japan last week would not affect the MPA projects, which are expected to solve bottlenecks in the capital city including the heavy traffic, officials say.

Hatta said that the meeting agreed on three things including the selection process for fast-track projects in development of transportation facilities such as seaports, airports, power plants and clean water plants in Jakarta, Bogor, Depok, Tangerang and Bekasi areas.

“The second agreement is that the study of the master plan on the MPA projects will commence in May of this year and is expected to take one year to complete,” he told a news conference after the meeting, adding that the master plan would include studies on the projects and financing.

The third agreement, Hatta added, was to organize a high-level consultation meeting to be held this month. “We will discuss new regulations in Indonesia on taxes, customs, investment impediments and all things related to the success of the MPA project.”

Kikuta said the meeting “agreed on a lot of concrete results”, giving the Japanese government more confidence to take advantage of its high technology system to develop the infrastructure of Greater Jakarta to spur the investment climate in the areas.

“Despite the recent massive earthquake and tsunami in Japan, we are still committed to the cooperation between Indonesia and Japan as a critical point in the economic ties between the two nations,” said the vice minister, who is one of the two high-ranking officials allowed to leave the country in the midst of the disaster recovery.

Last Friday, an 8.9-magnitude offshore earthquake hit the country’s northeast coast, triggering a 10-meter high tsunami that killed hundreds of people and paralyzed the country’s economic activities.

Indonesia and Japan last year signed a memorandum of cooperation on the development of the MPA, which involves the Japanese government and private firms financing the construction of infrastructure in Greater Jakarta and surrounding areas. It is scheduled to commence in 2013.

Greater Jakarta, also known as the Jabodetabek area, is home to 10 percent of the overall 237 million population of Indonesia. The area is also where 60 percent of national export originates and is the location where 80 percent of economic decisions are made.

But infrastructure bottlenecks have often hampered faster growth in the areas, which are widely known for the unsolved heavy traffic.

The project is also a part of the country’s 2011 to 2025 economic masterplan that is currently being intensely discussed with the private sector and regional governments.

Kikuta considered Indonesia “a strategic partner that is very important for Japan”, therefore he decided to not delay the project amid speculations that Japan would delay investment projects as it might want to focus on its onshore economic recovery.

Japan was the fourth-largest foreign investor in Indonesia last year, with a total investment of $712.6 million.

The country is also Indonesia’s number one export destination for non-oil and gas products and the second-largest supplier of non-oil and gas goods after China.

—JP/ Esther Samboh