Indonesia: New airport tests limits of regional development

Rice fields and a large population of sheep used to be the main features of Majalengka, a remote region of West Java, about 180km east of central Jakarta. Now, a large international airport is seeking to turn it into an economic hub by luring businesses from industrial areas near the capital. The Kertajati International Airport is racing to open its doors before the Idul Fitri holiday in June, when millions of Indonesians return to their hometowns to mark the end of Ramadan. The deadline appears extremely tight — when the Nikkei Asian Review visited the site on February 28, the exteriors of the terminal, with designs resembling feathers of a peacock, and a nearby access road were still being built. “It is 90% done . . . I am optimistic” of hitting the June target, said Virda Dimas Ekaputra, president of the airport operator, Bandaraudara Internasional Jawa Barat. The project is more than just another airport. A majority of BIJB is owned by the West Java provincial administration, making this the first time that a local government has taken the lead in an airport project. Investors are watching closely to see if this is a baby step towards a broader deregulation of the airport sector, currently under a near monopoly of the central government. If so, it should unlock opportunities in the country’s fast-growing aviation industry, where $22.9b in airport infrastructure investment is needed until 2036, according to Nomura. Story has more details.<br/>