State-owned port operator Pelindo II, also known as Indonesia Port Corporation (IPC), has secured a concession right of 70 years to operate the country’s largest port, which is to be built in Kalibaru, adjacent to Tanjung Priok Port in North Jakarta.
The concession right is shorter than the 99 years demanded by Pelindo II, but the Transportation Ministry has given the company an option to renew the concession for another 25 years.
Pelindo II president director Richard Joost Lino said that the government’s decision to award the 70-year concession paved the way for the company to begin the long-waited construction of the port, which is also called New Tanjung Priok port.
“We are going to start the first phase of the project on Sept. 17 and we are optimistic it will commence operations in 2014,” Lino told reporters in Jakarta following the signing of the concession right. President Susilo Bambang Yudhoyono was scheduled to open the ground-breaking ceremony, he said. The company is going to develop three container terminals with a total capacity of 4.5 million 20-foot equivalent units (TEUs), and two fuel berths, with a total investment of up to US$2.5 billion.
Each terminal would be built with draft of 16 meters, allowing a ship as large as 5,000 TEUs to dock.
He also said that they would construct a 7-kilometer toll road connecting Marunda Logistics Park to the new port, which would cost Rp 1.7 trillion (US$178.5 million) in the first phase.
“The toll road is not a Public Works Ministry project. This belongs to us under a permit from the Transportation Ministry,” he said.
He said that the company would build the project by using its internal cash, advanced payments from operators such as Maersk Line and loans from national private banks.
They also plan to raise Rp 2 trillion ($214 million) from bond issuance sometime in September.
“Besides that, we have set up PT Pengembang Pelabuhan Indonesia to operate the port after the construction is finished,” he added.
In addition, he said that the second phase of the project would begin in 2018, by constructing four container terminals with a total capacity of 8 million TEUs.
The second phase is predicted to cost $1.5 billion and be finished in 2022.
Coordinating Economic Minister Hatta Rajasa, who attended the signing ceremony of the concession, said that Kalibaru was one of the most important infrastructure projects in the country to help accelerate economic growth.
“Kalibaru is an important project stated in the Sislognas [Logistics National System] document and connectivity blueprint that supports the acceleration and expansion of our economic development. I am very glad that we can construct this project,” Hatta said.
Leon added that the country’s busiest port, Tanjung Priok, needed more facilities to keep up with increasing container traffic. “Container traffic in Tanjung Priok increases by 25 percent every year. Kalibaru will help ease that,” Leon said.