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tate run port firm Pelindo II, also known as the Indonesian Port Corporation (IPC), on Friday kicked off the development of the Kalibaru Port in North Jakarta, which is to become the country’s largest industrial port.

President Susilo Bambang Yudhoyono led the ground breaking ceremony marking the start of the Rp 22.66 trillion (US$2.47 billion) project. Transportation Minister E.E Mangindaan, Coordinating Economic Minister Hatta Rajasa, State Owned Enterprises Minister Dahlan Iskan, Public Works Deputy Minister Achmad Hermanto Dardak, Jakarta Governor Joko “Jokowi” Widodo and IPC president director Richard Joost Lino also joined the ceremony.

In his address, Yudhoyono said that the Kalibaru Port, which would have capacity of handling 13 million 20-foot containers, was crucial to remove logistic bottlenecks in the country.

“Every infrastructure project whether it is a road, airport or port such as Kalibaru or the New Priok Port that begins [construction] today, is very important because it will further boost Indonesia’s economy. Thus, this will improve our competitiveness in the world,” he said.

He urged the IPC to finish the project on time and operate it professionally because logistics costs should be reduced so that the prices of goods shipped to eastern parts of Indonesia could be lowered.

Armed with a presidential decree issued in April last year, the IPC is the sole developer of the project, which is to be constructed in three phases.

In the first phase, the firm will construct three container terminals with a total capacity of 4.5 million 20-foot equivalent units (TEUs) and two fuel berths that are expected to be completed by the end of 2017.

Each terminal will have a draft of 16 meters, allowing a container ship with a capacity of up to 8,000 TEUs to dock.

In the future, the draft will be deepened by up to 20 meters to cope with much larger ships such as those with 18,000 TEUs.

“This is a historical moment for Indonesia because we have not expanded [the existing] Tanjung Priok Port for 130 years despite container traffic increasing at around 24 percent annually. We are committed to providing the best service in this port and to reducing dwelling time from 6.2 days to 3 days,” Lino said.

The port is 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.

The firm has secured a concession right of 70 years to operate the port adjacent to Tanjung Priok Port.

The concession right is shorter than the 99 years demanded by Pelindo II, but the Transportation Ministry had given the company the option to renew the contract for an additional 25 years.

Kalibaru initially began as part of a plan to expand Tanjung Priok Port through the construction of new terminals that would have a capacity of 1.9 million TEUs.

However, as part of the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI), the government decided to expand the terminals into a port and appointed the IPC as the sole project developer.

Moreover, Lino stated that state-owned publicly listed highway company Jasa Marga planned to construct a 7-kilometer toll road connecting Marunda Logistics Park to the new port, expected to be finished before 2016.

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