More than half of the homes in Aceh and Nias that were destroyed by the 2004 tsunami have been rebuilt.

The second phase of reconstruction has started, with work being carried out to restore the infrastructure of the once-devastated areas.

The update was given by Dr Kuntoro Mangkusubroto, Director of the Aceh and Nias Reconstruction and Rehabilitation Agency.

About half a million people in Indonesia's Aceh province and Nias island lost their homes to the tsunami that struck in December 2004.

Close to 150,000 were killed in that disaster.

The international community responded generously, sending immediate aid and pledging some US$7 billion for reconstruction and rehabilitation efforts.

Two years on, some 12,500 projects are underway.

They involve the Indonesian government, some 40 donor countries and hundreds of non-governmental organisations.

According to Dr Kuntoro, targets have been met.

He added: "Only some 30,000 people of the 560,000 displaced are living in temporary shelters and barracks. About 97,000 houses have been built, or more than 50 percent because we have to build around 128,000 houses. But it's not only houses that we build there. We also rehabilitate rice fields, the paddy fields, and more than 85 percent of the rice fields have been rehabilitated and expanded."

But a lot of work remains to be done in Aceh and Nias.

The agency only has two more years left to finish its major projects, which not just includes building houses and infrastructure, but helping the economy get back on track.

Dr Kuntoro says his agency, which was set up two years ago, faces a multitude of challenges: "Logistics is still a problem especially in the outer islands. How do you transport building materials when there's no port and there's no internal route connecting one tip to another tip on an island. Corruption is there and people still find it difficult to differentiate what's right and what's wrong."

But he's confident that the agency will be able to complete most of its major projects by the end of next year.

He's now in Singapore with fifteen businessmen from Indonesia, to explore cooperation in developing businesses in Aceh and Nias. - CNA/ch