Areas of Indonesia devastated by the Indian Ocean Tsunami are marking the third anniversary of one of the worst natural disasters in modern history. As the effort to build housing and roads wraps up, reconstruction officials say they are now focusing on helping tsunami-stricken areas become self-sufficient. As Chad Bouchard reports from Jakarta, challenges remain in preparing local leaders to run rebuilt communities.

Tourists ride past warning sign in Khao Lak, Indonesia 25 Dec 2007

More than 160,000 people died or disappeared in northern Sumatra on December 26, 2004, when towering waves battered the coast.

Tens of thousands more perished in a dozen countries surrounding the Indian Ocean.

With the help of international donors and aid organizations, Indonesia has built more than 100,000 houses to replace those destroyed in the disaster.

That puts housing reconstruction three months ahead of schedule. Teams are on target to finish 20,000 more by next April.

Other new construction includes 2,000 kilometers of roads and about 800 schools.

Nia Sarinastiti of the Multi Donor Fund, which the World Bank set up to handle international tsunami aid, says her organization now focuses on handing this new infrastructure over to local governments.

"We are preparing what we call a transitional phase to help them be able to manage, operate and maintain the assets that is being left," Nia said.

International donors have spent $4.6 billion to rebuild Aceh.

The Multi-Donor Fund was scheduled to finish its activities in 2010, but now plans to extend work until 2012 to help with the transition.

Indonesia's Aceh province, which was hardest hit by the earthquake and the tsunami that followed, also faces challenges from its past. A bloody separatist conflict raged there for 30 years before the tsunami hit.

A peace deal was signed in 2005.

Kuntoro Mangkusubroto, head of the state reconstruction agency known as the BRR, says the war left thousands of people unprepared for life during peacetime.

"Things are a little difficult since about 14,000 ex-combatants who do not have any skill now are unemployed, and we have to have an extensive program on how to re-skill them or give them new skills such that they can cope with the society there in Aceh," Kuntoro said.

Some donors are concerned the area may see an economic slump after the reconstruction jobs disappear. That could complicate efforts to integrate former insurgents into the economy.

Reconstruction officials say Aceh's new government will need to focus on attracting domestic and international investment to provide jobs and growth for the long term.