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tate-owned airport operator PT Angkasa Pura (AP II) plans to gradually raise Rp 6 trillion (US$470.5 million) from the bond market in two years to finance its development projects.

'€œWe will issue Rp 2 trillion-bonds this year and issue another Rp 3 to 4 trillion next year,'€ said AP II president director Budi Karya Sumadi.

The bonds would mature in between five and seven years, with an adviser appointed two months later, he said on Tuesday.

The Rp 2 trillion bonds would be issued either in September or October this year, he went on.

The raised funds from the bond issuance this year will be used to finance part of its capital expenditure (capex) this year.

The firm plans to spend Rp 5 trillion in capex this year.

Budi said that while the Rp 2 trillion would be generated from bond issuance this year, the firm would use its internal cash and loans to obtain the remaining Rp 3 trillion in funds.

The raised funds from the bond issuance would be mainly used to develop terminal 3 at Soekarno-Hatta International Airport, he further explained.

The other Rp 3 trillion, meanwhile, would be used to develop the airport'€™s terminal 1 and terminal 2, such as to construct aprons, repair taxi ways and carry out renovations, he told reporters.

'€œWe will also use the funds to develop a number of airports under our management,'€ Budi said.

AP II, along with state-owned Angkasa Pura I, was criticized by Transportation Minister Ignasius Jonan late last week for falling short of complying with the standards set by the government.

Both airport operators have vowed to improve their services.

AP II operates 13 airports nationwide, with one in Jambi yet to undergo renovations.

Soekarno-Hatta remains the biggest budget spender as it operates at overcapacity and is in need of revitalization.

AP II data said the annual number of passengers at Soekarno-Hatta amounted to 60.13 million in 2013, nearly three times its annual capacity of 22 million passengers.

To support its development projects, AP II has proposed capital injection of Rp 3 trillion from the government this year '€” as part of the government'€™s stimulus plan for 35 state firms, with the funds being allocated to finance its Soekarno-Hatta development projects.

However, House of Representatives Commission VI overseeing state enterprises and the State-Owned Enterprises (SOEs) Ministry reached an agreement early Wednesday to allocate only Rp 2 trillion for AP II.

The decision still needs to be discussed with the House'€™s budget committee and the SOE Ministry before it can be approved in a plenary meeting.

Based on its previous presentation in front of House Commission VI, AP II stated that state capital injection would help the firm fund airport development.

The firm previously stated that it would need Rp 41 trillion to develop Soekarno-Hatta until 2021, from the total Rp 63.3 trillion needed for all airport development projects until 2021.

AP II previously said that it expected to obtain Rp 13 trillion in state capital injection from this year until 2021.