Construction Starts at Gudang Garam's Kediri International Airport

Jakarta. Construction works at the Kediri International Airport in Kediri, East Java, began on Wednesday after a virtual kick-off ceremony led by the Coordinating Minister for Maritime Affairs and Investment and acting Transportation Minister Luhut Binsar Pandjaitan.

"This project has been in the pipeline for two years. This is a historical moment, the first time a private company is building an airport in Indonesia. The president told me to tell everyone involved in the construction to stay optimistic, work hard and stick to the Covid-19 health protocols," Luhut said.

The construction of the airport will be done under the supervision of a government and business entity cooperation scheme (KPBU) between state-owned airport operator Angkasa Pura I and cigarette company Gudang Garam.

The public-private partnership will follow a "build, operate, transfer" deal whereby a public facility is built and then operated by a private enterprise for some time before the ownership is eventually returned to the government.

The project is self-funded by Gudang Garam using its own internal funding, as revealed last August. 

Luhut said the airport is expected to improve connectivity nationwide, especially considering East Java has a population of over 40 million.

The airport will also cater to hajj flights from East Java.

"The new airport will be very impactful since it will serve international flights including flights to and from Mecca during the hajj season," Luhut said.

East Java Governor Khofifah Indar Parawansa said the new airport will also boost the province's agriculture and maritime sectors.

The Kediri International Airport is located 120 kilometers from the provincial capital Surabaya and is close to Blitar and Nganjuk.

A total of 1.5 million passengers are expected to go through its turnstiles in the first year. Its total capacity is expected to reach 10 million passengers a year.

The 457-hectare airport will have a 3.3-kilometer runway, large enough for 4E-class planes, including Boeing 737s.

The construction of the airport will take at least two years. Angkasa Pura I will be the operator once it's completed.