The groundbreaking of an airport in Kediri, East Java, that is funded by major cigarette producer Gudang Garam will begin in March at the latest, the East Java administration has announced.

Gudang Garam, through its subsidiary Surya Dhoho Investama, will spend around Rp 10 trillion (US$732.4 million) to acquire more than 450 hectares of land for the airport, as well as for construction development.

East Java Transportation Agency head Fatah Jasin said the airport would be the first in the country that was fully owned by a private firm, adding that the government’s role in the airport’s operation would be limited.

“The groundbreaking ceremony will depend on whether [Gudang Garam] has acquired all the land, but it will be between February and March as the President will be there,” Fatah told The Jakarta Post on Thursday.

The airport would be the third privately funded airport after Kulonprogo International Airport in Yogyakarta and Bintan Airport in Riau, according to the Transportation Ministry.

The Kediri airport, located around 20 kilometers from central Kediri, is on the government’s list of national strategic projects — even though it is being funded by the private sector — and is expected to alleviate the overburdened Juanda International Airport in Surabaya, which is around a two-hour drive from Kediri. Surabaya is Indonesia’s second-largest city and a thriving economic hub.

The Kediri airport is projected to finish construction three years from now and accommodate more than 10 million passengers. The first phase of construction will take a year, with a capacity of 1.5 million passengers.

The airport will have a 3,000-meter runway to accommodate a wide range of aircraft, such as Boeing B777s and Airbus A350s, bigger than the nearby Abdulrachman Saleh Airport in Malang.

Gudang Garam has yet to acquire a portion of the land needed for construction but has garnered the support of local communities, Kediri Regent Abdullah Abu Bakar and the National Land Agency, said Fatah.

Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan has even met with Muslim clerics at Lirboyo Islamic boarding school on Sept. 2, 2019, to gain their approval.

“Land acquisition for the Kediri airport is almost finished,” Luhut told reporters on Thursday. “We will need another ha to start the groundbreaking process but we will first compensate the previous landowners.”

The government has taken charge of the licensing process and later, the daily operations of the airport through state-owned airport operator PT Angkasa Pura I, Luhut added.

East Java Governor Khofifah Indar Parawansa told the Post in December 2019 that Kediri airport would bring about a significant impact on the economic development in several regencies in East Java such as Blitar, Tulungagung, Trenggalek, Nganjuk and Ponorogo.

“In East Java, the economic gap is not only between cities and rural villages but also between the north and south,” she said.

The airport’s development is in line with local administration’s priorities to build ring-roads circling Mount Wilis, which is surrounded by several regencies in the southern part of East Java, Khofifah added.

The idea to build a new airport was first voiced by East Java Deputy Governor Emil Dardak to help boost tourism and agriculture in the southern part of East Java, with several regencies interested in hosting the airport before Gudang Garam decided on Kediri.

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