Jakarta. The government is forging ahead with its plan to construct an industrial area on Rempang Island, despite opposition from local residents who reject relocation and have clashed with authorities in recent weeks.

Investment Minister Bahlil Lahadalia said on Monday that the government is offering compensation to residents affected by the project, which is set to occupy an area of up to 2,500 hectares.

The island spans approximately 17,000 hectares, with 10,000 hectares designated as conservation areas and the remaining 7,000 hectares considered habitable.

According to Bahlil, Xinyi Group, a major Chinese glass manufacturer, has committed to investing $11 billion to build a factory on the island.

"We must employ a soft and civilized approach to resolve this issue while respecting the islanders who have lived there for generations," Bahlil said in a statement.

The government has identified around 700 families affected by the relocation plan. Each family will receive 500 square meters of land and a 45-square-meter house as compensation within the next seven months, the minister said.

Additionally, each affected individual will receive Rp 1.2 million in financial assistance and the same amount for renting a house until their new homes are ready. Furthermore, fishing equipment and boats will be provided to islanders, most of whom work as fishermen.

Bahlil said the government's plan includes the development of an integrated business district on the island, named Rempang Eco City. This district will encompass an industrial zone and tourist resorts, with the aim of boosting revenue and generating jobs for residents.

The investment from Xinyi Group alone is projected to reach Rp 300 trillion ($19.5 billion) once it is fully operational on the island, he added.

"If we miss this opportunity, we will lose the potential to increase revenue and create jobs for the residents," Bahlil said.