T

he East Java provincial administration is to build a new industrial zone in Mojokerto to support the one in Gresik; they are both to be integrated with the Lamong Bay seaport on the border of Surabaya and Gresik.

East Java Governor Soekarwo said the new industrial zone would be built on the north side of the Brantas River in Mojokerto, covering a 15-hectare plot.

'The site is ready to be turned into the Silicon Valley of Indonesia,' said Soekarwo over the weekend, expressing his hope that the development of the new industrial zone could be finished according to the set target.

He said a 36.3-kilometer toll road connecting Mojokerto and Surabaya, which was being developed by state-owned construction company PT Wijaya Karya, was designed to support the economies of both areas, including the new industrial estate.

The development of the toll road, which was started in 2007, had been temporarily stalled because of a sharp increase of the price of the land needed for the project.

Chairman of the East Java's branch of the Indonesian Real Estate (REI), Erlangga Satriagung, said that the province needed a new industrial estate, as the existing ones in Surabaya and Sidoarjo were already full.

At the same time, he said, 300 of the total 563 hectares in the industrial estate in Rembang, Pasuruan, have been developed into factories.

'The industrial estates in Gresik, Surabaya, Sidoarjo and Pasuruan can no longer accommodate any more large-investment industries. That's why the provincial administration has to prepare regulations to ease the development of new industrial estates,' Erlangga said.

Apart from new industrial estates, according to Soekarwo, his administration had also been preparing other infrastructure to support the development of the Java Integrated Industrial Port Estate (JIIPE) in Gresik.

Soekarwo said that the development of the JIIPE, of the Tanjung Perak port in Surabaya and of the Lamong Bay port on the border of Surabaya-Gresik would become the main economic generators for the eastern regions of Indonesia.

This, he said, was because the three were included in the country's Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) implemented to attract investors.

Separately, port operator PT Pelabuhan Indonesia (Pelindo) III's finance director I Gusti Ngurah Askhara Danadiputra said that his company had allocated Rp 500 billion (US$41 million) to develop the port located in the JIIPE compound, which is situated some 25 km to the north of Surabaya.

'JIIPE is currently under construction. The funds come from the company's internal sources,' Askhara said on Friday.

JIIPE is a project that integrates a deep seaport, an industrial area and a residential estate in one package.

The project has been jointly developed by PT Usaha Era Pratama Nusantara, a subsidiary of PT AKR Corporindo Tbk, and PT Berlian Jasa Terminal Indonesia, a subsidiary of PT Pelindo III.

The site is located some 55 km from the Juanda International Airport in Surabaya and has a direct access to the toll road connecting Surabaya to other major cities in East Java.

Askhara said that JIIPE would cover a 2,898-hectare plot in which 371 hectares were allocated for the seaport, 1,761 hectares for the industrial estate and 766 hectares for the residential complex.

He said that 85 hectares in the port area had been reclaimed from the sea, while the 250-meter pier was scheduled to start operation by March 2015.

'The completion of the initial development stage of JIIPE is projected to finish at the same time as the completion of the deepening work of the Surabaya western shipping route [APBS] that is currently 35.7 percent finished.'

APBS is an entrance gate leading to the Tanjung Perak port and its surroundings.