The construction of Indonesia’s Patimban Port will start this month, Singaporean newspaper The Straits Times has reported.
According to an article published on July 30, contracts for the $3bn, Japan-backed project were exchanged in Indonesian capital Jakarta at the end of July, with transportation minister Budi Karya Sumadi stating that the initiative will be crucial for easing goods movement within and over the nation’s border.
The port is scheduled to begin operations in March — starting with a car terminal and ferry terminal — with its development operating in three phases until 2027.
Upon completion of the first stage, the facility will be able to handle 3.5m teu containers, with capacity being increased to 5.5m teu in the second phase and 7.5m in the third phase.
Mr Budi explained during signing of a contract agreement on the venture: “We really want to increase our competitiveness and lower our logistics costs through better services. That’s why this is an important project.”
Port in focus
Under the contract, the initiative will be carried out by a consortium made up of Japan’s Penta-Ocean Construction, TOA Corporation and Rinkai Nissan Construction and Indonesia’s PT Wijaya Karya and PT Pembangunan Perumahan.
The port development venture is part of an infrastructure push by Indonesian president Joko Widodo to increase connectivity and an attempt to make Indonesia rival Singapore as a transhipment hub.
The new dock, positioned near some of Indonesia’s key industrial areas, will reduce hefty congestion at the port that currently sees the majority of the country’s international trading activity: Tanjung Priok.
Almost 83% of the total costs of the project’s first phase will be covered by a $1.1bn loan from Japan that Indonesia has secured.
According to Mr Budi, Indonesia’s Ministry of Transportation has received applications from three to four consortiums participating in the bidding to operate the port.
Local media reports have said that state-owned seaport operator Pelindo II (or Indonesia Port Corporation) has partnered with Japanese firms to join the bidding.
Government earlier said that it hoped the facility’s operation will be 51%-owned by a local business (while the remainder could be in the hands of foreign companies).
Speaking to The Straits Times, Zaldy Masita, Indonesian Logistics Association chairman, called for government to engage private firms in operating the new port rather than turning to Pelindo II, currently in charge of Tanjung Priok Port, as the move will generate a healthy competition between the two ports.
He also said that this operatorship will determine if the new port could help significantly lower Indonesia’s expensive logistics costs