I

ndonesia will next year kick off construction on the much-anticipated Kuala Tanjung Port in North Sumatra that will connect the country'€™s western region to the international world.

The construction of the port will be managed by state-run port company Pelindo I, which already manages ports in Sumatra.

Pelindo I spokesman Eriansyah says the port'€™s master plan had been approved and signed by Transportation Minister E. E. Mangindaan and that its detailed engineering design had been completed.

The firm is currently processing all the necessary documents and permits before getting started on the project.

'€œWe are processing several documents, including the amdal [environmental impact analysis] with the Environment Ministry. We are optimistic that we'€™ll start the project next year as this is an important project for the country,'€ Eriansyah told The Jakarta Post, adding that Pelindo I had also secured a presidential decree in 2012 to help the project.

According to the master plan, Eriansyah said the port was going to be developed in several phases because it would have a total capacity of 25 million 20-foot equivalent units (TEUs) by the end of 2030.

The port'€™s draft would be 17 meters deep to allow large ships to enter the port.

In the first phase, the port will be built with a capacity of 1 million TEUs and it is projected to be completed by the end of 2015.

'€œThe port needs to begin operations soon because container traffic passing through Malacca Strait reached 51 million TEUs last year. The figure will continue to increase in coming years. This is a good opportunity for us,'€ he said.

He said the first phase of the project would cost around Rp 6.5 trillion (US$668.86 million) and that it would be financed by a syndicated loan from state-owned banks.

The firm expects to sign the loan agreement in the first semester of this year.

In addition, he said that Kuala Tanjung was an important project because the existing Belawan Port had become overcrowded, particularly in its terminal that accommodated crude palm oil (CPO).

The firm plans to build a container terminal for CPO in the first phase of the project to serve palm oil produced by state-run plantation company PT Perkebunan Nusantara (PTPN) IV, he said.

Contacted separately, Transportation Ministry sea transportation director general Bobby Mamahit said that Kuala Tanjung was part of the central government'€™s Masterplan for the Expansion and Acceleration of Indonesia'€™s Economic Growth (MP3EI) programs.

The project would be developed in a public-private partnership scheme as it was a huge project.

He said that the port was an important project because it would play a role in capturing markets in the western region of Indonesia.

'€œWe are hoping this project can be as successful as Kalibaru [Port in North Jakarta] and can be developed as soon as possible because it is an important port infrastructure in the western [part of Indonesia],'€ he told the Post.

He said that the port infrastructure project was crucial, not only because Indonesia is a maritime country but also because the country is expected to see strong trade growth.

In addition to that, Kuala Tanjung has been listed in the National Logistics System (Sislognas) as a project that might help improve the nation'€™s logistics chain by reducing inefficiencies.

Apart from Kuala Tanjung, he said that the new Bitung Port in North Sulawesi was expected to be port hub in the eastern part of Indonesia.

The government is currently studying the Bitung Port project and expects to finish the master plan in the near future.