JAKARTA, May 4 Asia Pulse - Malaysian, Chinese and Indian investors willbe involved in a project to open oil-palm plantations in East and WestKalimantan, an official on the vice presidential staff said.

The foreign investors would take part in the project under bilateralarrangements, the vice presidential staff official, La Ode Kamaludin, saidon the sidelines of a meeting with the Borneo Tropical RainforestFoundation here on Friday.

He could not indicate the exact locations of the areas that would becovered by the project but said it would include one million hectares ofland in East Kalimantan and one million hectares in West Kalimantan.

According to La Ode, the absence of vegetation on the critical lands wouldonly make it easier to turn them into plantations.

"The plantations will not be run according to nucleus system but the localpeople will be given a role to play in them while the land will remainpartly theirs and partly the state's," he said.

The plantation project was expected to absorb some two million workers andwould become a solution for illegal Indonesian workers deported fromMalaysia, La Ode said.

"At the beginning, the idea was to solve the problems posed by last year'sdeportation of hundreds of migrant workers from Malaysia to Nunukan (EastKalimantan)," he explained.

Laborers at the plantations would be paid the same wages as their peersworking on oil-palm plantations in Malaysia, he said.

"The standard wages will not be lower than those prevailing in Malaysia,"La Ode said.

The project was expected to be started in late 2004 with a totalinvestment of Rp5 trillion (US$574 million).

The land-clearing process would be conducted gradually because based onMalaysia's experience, it would need three to four years to open 100,000hectares of land.

Thus it would take 10 years to clear 1 million hectares of land, La Odesaid.

"The opening of the oil-palm plantations will be followed by developmentof downstream industries so that we will be able to enjoy the added valueof crude palm oil," La Ode said.

The foreign investors had also expresssed interest in participating in thedevelopment of other agri-business ventures such as rubber plantations, LaOde said.