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Richard Joost Lino: (JP)
As the world’s largest archipelagic country, the maritime sector has been left behind compared to other sectors in Indonesia. Ports built by the Dutch during the colonial era still operate today, showing that ports and logistics have never been a priority for Indonesia. The Jakarta Post’s Nurfika Osman recently talked to Richard Joost Lino, president director of state-owned seaport operator Pelindo II, known as the Indonesia Port Corporation (IPC), to get an insight into the company’s development plans. Below are excerpts from the interview.
Question: What are your big plans for the next three years?
Answer: We have many plans to develop all of our ports across the country. But, our biggest project is the US$4 billion Kalibaru Port project, or as we call it New Priok because it is actually an expansion of the Tanjung Priok Port that we have been operating since the Dutch colonial era until today. We were just awarded a concession of 70 years and an additional 25 years to operate the port. The first phase of the construction will be finished by the end of 2017 comprising three
container terminals and two fuel berths. The container terminals will have a total capacity of 4.5 million 20-foot equivalent units (TEUs) and each fuel berth will have a total capacity of 9 million tons of fuel a year. We also plan to construct an access road in collaboration with highway company PT Jasa Marga connecting Marunda Logistics Park to the port.
The first container terminal will start operations in the third quarter of 2014 with a capacity of 1.5 million TEUs. And then, each of the rest of the four terminals will be ready one by one over the coming years until 2017. The draft of each terminal will be 16 meters deep, but we will dredge them to 20 meters in the future to allow bigger mother vessels to dock.
In addition, we will set up a subsidiary at the end of this year that will work with operating companies investing in New Priok such as the Maersk Line, China Shipping, Cosco and NYK. They are our partners and will bring a lot of benefits to Indonesia.
The second-phase construction will start in 2018. We will have four more container terminals with a total capacity of 8 million TEUs. By the end of 2022, the combined capacity of Tanjung Priok and New Priok will be around 22 million TEUs. We will be bigger than Singapore Port’s 19 million TEUs.
Apart from New Priok, we will construct Sorong Port in West Papua by the end of this year. It will be a distribution center of goods in the east with a capacity of 500,000 TEUs when it operates in the middle of 2014. We have acquired a 7,500-hectare site to further expand the port in the future. By way of comparison the current Tanjung Priok Port is built on an area of only 600 hectares.
We are currently constructing four new terminals in Teluk Bayur Port in Padang, West Sumatra, to help accommodate more containers. The construction has been under way since last year and the whole project will be finished by the end of 2012. We are also investing in more cranes there to reduce congestion.
Bengkulu Port and Panjang Port in Lampung are also being upgraded. We plan to build a new container terminal in Bengkulu next year while at the moment we are optimizing port operations in Panjang by adding four new cranes.
In Pontianak, West Kalimantan, we are thinking of building a new port because the existing port can not be developed any further as it is located in the center of the city. We are now conducting a feasibility study to build a port in Kijing Island, some 40 kilometers from Pontianak. It is a strategic location because it is near Malaysia, Singapore and Thailand.
What about your plans to develop the soft infrastructure in ports operated by Pelindo II?
We are preparing the Indonesian Logistics Community System or ILCS to create an integrated online platform to help streamline shipment traffic in Tanjung Priok. This platform will enable logistics companies to monitor and arrange the container traffic, documentation and electronic payment. We’re buying the system from Microsoft for this project because we want to create a world class company and help reduce logistics cost. We expect to implement this system by the end of this year.
We will gradually implement the same ILCS system in all 11 ports that we operate in the country.
What are your plans to develop the human resources to meet the demands of the company’s plans?
We’re investing $50 million to develop human resources over the next three years because to be honest, Indonesia does not have enough qualified people in the sea-transportation sector, especially in ports and logistics areas, even though we are the world’s largest archipelagic country. What an irony. We send our employees to study in Singapore, Hong Kong, the Netherlands, Germany and the US. We also bring in professors from Kuehne Logistics University in Germany to teach our employees here. The professors visit Indonesia every three months to teach our employees.
We are also going to have a logistics school in Ciawi, West Java, that will be able to not only train and educate our employees, but also people who are interested in this sector. The school is a joint venture project between IPC and the Netherlands Maritime University. Facilities that we will have here are going to be like those in Rotterdam. We can provide education from vocational training to a masters degree in port and logistics.
The building is under construction on a 5-hectare plot and expected to be finished next year. We have secured another 5-hectare site next to the building in order to further expand the school.
It is such a shame that a country as big as Indonesia with our Tanah Air [Land and Water] concept does not have any school or institution that focuses on sea, ports and logistics. I wish all of us could understand the philosophy behind that phrase, that water is a big part of Indonesia which means ports are a very important sector to better develop the nation.
I am not going to use the school as a cash cow for our company because that is not my goal here. The goal is to have qualified people in the ports and logistics sector so the business will run smoothly.
Is building human resources a challenge?
Human resources is the biggest challenge because every infrastructure project that we do will be pointless if we do not have people who are able to operate it. To me, it is stupid if a company is not willing to spend more to better develop its human resources, such as financing their studies, because in the end it is their own business that will reap the advantages. I insist that we do not skimp on human resources development because better educated and trained people is all that we need to fix everything in this country, especially in the port infrastructure sector.
What about the bureacracy?
Well, where can you find a $4 billion project that needs 26 months for approval? I bet only in Indonesia. We want to get everything done very fast to accelerate economic growth here, but the bureaucracy always gives me a headache. The key is that I always have to be firm when it comes to dealing with the government and accept the system for what it is. If I kept thinking about the irregularities and uncertainties of the bureaucratic system, I would be stressed out.
