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ministerial regulation on land compensation will soon be revised to allow the government to acquire a wider area of the Sidoarjo mudflow in East Java, for road construction.

East Java Governor Soekarwo said Friday that the revision of a 2007 Home Ministry regulation on managing village resources, where article 15 stipulates compensation to villagers whose land is acquired for public interest, "would be finished in one week".

Soekarwo said the revision was necessary so that the acquisition could be executed as wide as the regency level.

The present regulation only allowed the acquisition to cover the village, while the Sidoarjo mudflow covers about 90-hectares comprising many villages.

"The regulation has hindered the Porong-Gempol road construction," Soekarwo said.

He expected that the land acquisition could be completed immediately so the construction of infrastructure projects to connect Porong and Gempol could begin March or April.

"We will build a 10.1-kilometer main road connecting Porong and Gempol."

The government will also build pipes for gas, electricity and water.

The construction is estimated to finish in March 2011, he added.

The Sidoarjo mudflow occured in May 2006 by the time PT Lapindo Brantas, owned by Golkar Party chairman Aburizal Bakrie, drilled parts of the area.

The Supreme Court ruled there was no evidence Lapindo caused the mudflow.

The mudflow has displaced 40,000 people.

On Friday, Sukarwo, together with Sidoarjo regent Win Hendarso and Sidoarjo Mudflow Mitigation Agency (BPLS) chief Sunarso, met Vice President Boediono, Finance Minister Sri Mulyani Indrawati, Transportation Minister Freddy Numberi and Public Works Minister Djoko Kirmanto.

Soekarwo said the government had invited an independent appraisal to estimate the land value.

The government will provide compensation of Rp 120,000 (US$12.96) per square-meter of wet land and from Rp 480,000 to Rp 650,000 for dry land.

The mudflow has caused government losses reaching Rp 11 trillion annually due to many factors, including heavy traffic pushing high logistic costs, Soekarwo said.

Soekarwo said ambassadors of China, South Korea, Japan, Belgium and France have urged the government to solve the infrastructure problems in the area as they caused losses to their businesses in East Java.

"East Java has an excellent economy.

"It will expand further with the construction *of the road*"

BPLS chief Sunarso said Lapindo mudflow relocated villagers whose land was located at the company's drilling area.

The relocation to housing complex Kahuripan Nirwana Village in East Java is expected to finish in 2011 or 2012, he said.