Business

JICT sees 30% drop in container
handling

The country's largest shipping terminal forecasts container handling to plunge heavily this year due to slowing exports and imports.

Resulting from the impacts of the deepening global economic meltdown, the Jakarta International Container Terminal (JICT) president director Derek J. Pierson said, shipping businesses were estimated to drop by 30 percent overall this year, with export activities likely to drop by 15 percent and imports by 30 percent.

"We have felt the impact of the *global economic* crisis since the fourth quarter of 2008, in which we saw 30 percent decline in the number of containers that we handled," he said.

JICT, which is 51 percent owned by Hong Kong-based Hutchison Port Holdings and 48.9 percent by state port operator PT Pelindo II, forecasted container handling to shrink by 30 percent to 1.33 million twenty equivalent units (TEUs) of containers from around 1.9 million TEUs last year.

In 2007, the company handled 1.8 million TEUs.

"Container handling will probably decline this year. We believe the country's economy will recover from the crisis by 2010," Pierson said.

"That's why we are expanding and investing more in infrastructure despite the *current* slowdown." Trade Minister Mari Elka Pangestu had said nonoil and gas exports would grow by between 4.3 percent and 8 percent, lower than the annual average 18.3 percent growth achieved between 2003 and 2007.

Nonoil and gas exports contribute about 80 percent to the country's total exports, which were valued at more than US$100 billion last year, up from $91.9 billion in 2007.

Pierson said to anticipate ever-growing exports in the future, JICT had earmarked around $30 million this year for expanding infrastructure at Tanjung Priok, North Jakarta.

"Up until 2012 the total investment was around $150 million," he said, adding that expenditure would be pooled from the higher margin proceeds the company received following the government's recent policy to raise the container handling charge (CHC) fee.

The company's first batch investment includes the two recently installed cranes worth $13 million.

The cranes are classified as Super Post Panamax Quay Crane, which are capable of lifting two 20 feet containers at once, accelerating the loading and unloading activities to 50 containers per hour from 26.

The company will also add two more cranes in April.

"Further investment will include the construction of additional storage areas, new gates, new truck parking areas and a new access to the planned Jakarta Outer Ring Road *JORR*," Pierson said.

Transportation Ministry Jusman Syafii Djamal said the government had targeted to complete the JORR project by 2011 to streamline the flow of trucks to Tanjung Priok Port.

According to the UN Conference on Trade and Development, Indonesia handled 5,74 million TEUs of containers in 2006, far smaller than 24,79 million TEUs managed by Singapore. (hdt)

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