State-owned port operator Pelindo III is speeding up construction on the Rp 3.4 trillion (US$353.6 million) Teluk Lamong multipurpose terminal project as the nearby East Java’s hub Tanjung Perak Port has been running overcapacity.

Pelindo III spokesman Edi Priyanto said that the firm was currently working on the domestic dockyard, causeway, container yard and connecting bridge in the project.

“We have recently started [the construction of] Teluk Lamong’s domestic dockyard while the connecting bridge and causeway are now 60 percent and 7 percent complete, respectively. We are optimistic that we can finish the entire
project in early 2014,” Edi told The Jakarta Post.

He said that the firm had finished the dockyard for the international market.

“We plan to start operations in April 2014. This project is not only aimed at supporting Tanjung Perak, but also reducing logistics cost,” he said.

According to the company’s recent data, Tanjung Perak Port in Surabaya has been overcrowded, forcing ships to wait for up to three days in the port, increasing logistics costs.

Currently, the port only has the capacity to accommodate 3.57 million tons of general cargo annually, while traffic stood at 6.92 million tons throughout 2011.

“Thus, we need Teluk Lamong to help ease congestion in Tanjung Perak and we have set aside more area [in Teluk Lamong] for future expansion,” he continued.

The company has prepared 300 hectares for Teluk Lamong multipurpose terminal project. As of now, they are only using one-sixth of it or 50 hectares.

In addition, he said that Pelindo III has acquired a 3,000-hectare plot of land in Gresik to create a new industrial port for East Java.

He refused to further explain the details of the Gresik project, but he said that the project would create an integrated port in East Java – Tanjung Perak, Teluk Lamong and Gresik, in the future.

“Creating an integrated port is very important because Surabaya is the main gate for trade to the capital city and the eastern part of Indonesia,” he said.