Aceh land prices soar on speculation

KOH GUIQING

In a worn government building in the tsunami-hit province of Aceh, 13 villagers gathered before a local official and an aid worker for a round of price bargaining.

The villagers were looking to sell 15 hectares of padi fields -- abandoned for five years due to poor irrigation - to reconstruction agencies in need of land to replace homes and roads battered by the tsunami.

"These people want to be millionaires," said local official and broker of the sale, T. Ahmad Dadek, referring to the villagers of Leuhan, an area largely unaffected by the tsunami, in Meulaboh.

It is easy to see how these villagers hope to make a profit. Land prices in the tsunami-ravaged city of Meulaboh have soared in the past few months on short supply and brisk demand, thanks to the spate of reconstruction efforts.

Several thousand died last December, when giant waves smashed into the west-coast city, eroding shorelines and sweeping away houses, businesses, cars and roads.

Salvation Army, a Christian NGO, is keen to buy the fields to relocate tsunami survivors still living in tents or barracks. However, its officials said, price remains a sticking point.

The NGO is willing to pay 5,000 rupiah for one-square-metre of land, but villagers insist on twice the rate, (8,000 rupiah per-square-metre) with a new house thrown in.

"The prices are too high. We will buy the land if the villagers can sell it at a lower price," said Salvation Army official Samuel Dambaw, who sends the villagers' price quotations to his bosses in Medan.

Finally, the price negotiations are over. After rounds of patient cajoling and promises of prompt payments from Dadek, the villagers relent.

"I told them other people in Meulaboh are suffering and need land to rebuild homes" said Dadek, who is in charge of 21 villages in Johor Pahlawan in Meulaboh.

They dropped demands for a new house and agreed to price their fields at 8,000 rupiah per-square-metre, all except one who insists that his 0.4 hectare land be priced at 15,000 rupiah per-square-metre because it is near the main road.

Control land prices?

Central Meulaboh has seen land prices double to 50,000 rupiah per-square-metre, while prices in the outskirts such as Lapang have rocketed nearly seven times to as much as 15,000 rupiah per-square-metre, local officials said.

Land prices are likely to climb higher in coming months on land speculation, and rebuilding efforts risk being stalled, said experts. A possible solution, they add, is if the government offers state-owned land for rehabilitation, or impose price-control measures on the sale of private-owned land - a harsh but necessary move.