In a development that could possibly upset the balance of established maintenance, repair and overhaul (MRO) players in Southeast Asia, Singapore-based developer Gallant Venture and Indonesian flag-carrier Garuda Indonesia have signed a memorandum of understanding to turn Bintan Airport in Indonesia into a major aviation hub.

The agreement calls for the current airport, which has a single 2,250-meter (7,380-ft.) runway, to undergo a $300 million development upgrade that includes adding a widebody facility, two 3,600-meter runways, extensive MRO capabilities as well as support and training facilities. Situated a few miles from Singapore's east coast, it is close to Singapore's Changi Airport, and Lion Air's new hub on Batam Island also is in Indonesia.

Garuda CEO Emirsyah Satar tells Aviation Week the new facility will offer three hangars and more MRO capability than the airline's currently overloaded base at Soekarno-Hatta International in Jakarta. “This is a major development for us,” he says. “It means we will be able to do our MRO right here, without sending our aircraft to Europe.” Satar says he also foresees tourism comparable to Bali's developing in Bintan.

The airport project includes plans for an adjacent 177-hectare aerospace industry park with engineering facilities, engine manufacturing and assembly, and an aviation academy.

Describing the deal as a “major milestone,” Satar says the MRO capability will start ramping up in the second quarter of 2014, with projected numbers of about 2,000 technicians by the end of 2015. The first scheduled Garuda flights from the airport are anticipated late next year.

Plans for an airport near the Bintan resort zone were shelved due to an unsuitable location and lack of expansion capacity.

With an initial investment of $300 million, developer Gallant Venture says it is in discussions with other non-Indonesian airlines about using the facility as a major destination. It also is talking with Changi Airport about cooperating on various initiatives, adds Gallant Venture CEO Eugene Park.

Park says he does not see the new facility as a threat to Changi airport, but rather as complementary at this stage.

“The big plus we offer is that we can guarantee Singapore-level quality of infrastructure,” he says. “We own the land and can develop it properly.” Gallant invests in and plans industrial parks and resorts in Bintan and Batam.

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