20/09/2007 (The Star Online), PUTRAJAYA - The Federal Government hopes the Kelantan state government will cooperate when its plan to develop the Eastern Corridor takes off.

Deputy Prime Minister Datuk Seri Najib Tun Razak said development of the eastern corridor was important to ensure its growth is on par with other states.

"The development of the eastern states is vital as it is the Government's plan for a balanced and equitable development of the whole nation.

"If the development for these states is not given a boost then its growth will be at a slower pace compared to states in the west coast," he said, adding that he could not provide too much detail on the development of the Eastern Corridor Economic Region (ECER) as he did not want to pre-empt the Prime Minister's announcement during the launch later.

He, however, said Prime Minister Datuk Seri Abdullah Ahmad Badawi was expected to announce targets for employment, investments and growth in the area as well as the major sectors to be developed.

Najib said the public, private sector and foreign investments would be involved in the development and that Petronas was the initial planner.

He added that the oil and gas sectors were only one of the many sectors involved in the development of ECER that would cost RM112bil over a span of 15 years.

Najib was speaking to reporters after witnessing a signing ceremony between Felda and Indonesia's PT Kalpataru Investama on the planting of oil palm in East Kalimantan.

On the agreement, Najib said it was part of the Government's and Felda's efforts to invest in the agriculture sector in a foreign land.

Under the agreement, Felda, through its subsidiary Felda Global Ventures Indonesia Sdn Bhd with a 75% equity, would be planting oil palm on two plantations totalling 21,000ha land in East Kalimantan. PT Kalpataru Investama's partner will hold the remaining 25% equity.

Although he said the venture would be very viable, Najib added that he could not forecast the profits as it depended on various factors.

Najib said palm oil from the venture would be sold to the world market.

At the initial stage, only 5,000ha would be developed beginning next year, he said, adding that a palm oil factory, with the capacity to produce 60 tonnes of oil an hour would be set up by 2011.