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tate-owned port operator Pelindo II says it will spend Rp 7 trillion (US$721 million) to develop Kalibaru Port in North Jakarta and Sorong Port in West Papua.

The amount is up 230 percent from the Rp 2.1 trillion that the firm, also known as the Indonesian Port Corporation (IPC), allocated for investment in 2012.

IPC president director Richard Joost Lino said that construction of the ports was crucial for
reducing logistics costs across the archipelago.

The ports are part of the so-called Nusantara Pendulum, the nation’s main sea corridor connecting six ports, including those in Belawan, North Sumatra, and Makassar, South Sulawesi.

“We’re investing a lot this year because we are building Kalibaru and Sorong, the most important ports in the western and eastern parts of Indonesia for the future,” Lino said in Jakarta on Tuesday. “When the construction of both ports is finished, they will reduce logistics costs and further drive trade as well.”

According to the firm, freight costs from Tanjung Priok Port in North Jakarta to Sorong Port could be reduced from $2,000 per one 20-foot equivalent unit (TEU) to $375 when Sorong is finished in 2015.

“We are now proposing a Keppres [presidential decree] to accelerate construction of the port. We expect to kick off the project at the end of this year,” he said.

Lino said that Sorong Port would sit on 7,500 hectares to allow
for expansion. The port will have an initial capacity of 500,000 TEUs
per year.

IPC has also said that it would spend Rp 1 trillion on Sorong Port, which would be built in partnership with PT Pelindo IV and five other shipping firms: PT Samudera Indonesia, PT Meratus Line, PT Salam Pacific Indonesia Line, PT Tanto Intim Line and PT Tempuran Mas.

Richard said that construction was about 4 percent complete on Kalibaru Port, which has been rebranded as the New Priok project. “We are going to announce the winner of Kalibaru’s first terminal operator at the end of this month or early March at the latest.”

When complete, the port will have an annual processing capacity of 13 million TEUs, although initially 4.5 million TEUs will come online when three container terminals are finished in 2015.

Richard said that IPC recorded a 26.2 percent increase in revenue to Rp 6.414 trillion for 2012 due to increased traffic at the 12 ports managed by IPC across the country.

The company posted Rp 1.79 trillion in net profits last year, up by 21.1 percent from Rp 1.478 trillion during the same period in 2011.

Besides the country’s main gateway, Tanjung Priok Port in North Jakarta, IPC also manages Teluk Bayur Port in West Sumatra, Jambi Port in Jambi, Panjang Port in Lampung, Pangkalan Balam Port in Bangka Belitung and Pontianak Port in West Kalimantan.

“Total container traffic handled by Tanjung Priok alone reached 6.214 million TEUs [in 2012], up from 5.679 million in the previous year [of 2011],” he said.

He predicted that traffic would reach 7 million TEUs by the end of 2013 due to strong economic growth.

The firm is slated to implement the Indonesian Logistics Community Service (ILCS) program over the next six months to create an integrated online platform to help streamline shipment traffic in Priok.

The platform will allow logistics companies to monitor and arrange container traffic, documentation and payment.