Indonesia's Angkasa Pura, India's GVK to develop new $500mln Java airport

JAKARTA, March 2 (Reuters) - Indonesian airport operator PT Angkasa Pura I plans to build new airport in Yogyakarta with India's GVK Power & Infrastructure Ltd worth 5 trillion rupiah ($567.4 million), an Angkasa Pura's executive said on Tuesday.

The project is a part of preliminary agreement signed by both parties in January this year to invest between $3 - $5 billion over the next four years to build international airports in Bali and Java.

"We're going to set up a joint-venture for the purpose next year," said Tommy Suetomo, Angkasa Pura's chief executive officer.

Inadequate infrastructure in Southeast Asia's largest economy is seen as both a hurdle to growth and a cash-making opportunity, with the government looking for the private sector to fund two-thirds of its needs.

Indonesia is India's third-largest trading partner in South East Asia and bilateral trade was $10 billion in 2008, according to the Ministry of External Affairs. ($1 = 8,812.500 Indonesian Rupiah) (Reporting by Fathiya Dahrul; Writing by Janeman Latul; Editing by David Fox)