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tate-owned port operator PT Pelabuhan Indonesia I (Pelindo I) has secured a 70-year concession to operate the Belawan International Container Terminal (BICT) in North Sumatra, paving the way for the company to begin expansion projects in one of the nation'€™s key ports for commodity exports.

Pelindo I president director Bambang Eka Cahyana said on Friday that the firm would kick off the Rp 2.6 trillion (US$229.7 million) expansion project later in May at the port, from which crude palm oil, rubber, cocoa, coffee and timber products are exported.

The expansion project at the country'€™s third largest port is aimed at increasing its terminal capacity from the current 1.2 million twenty-foot equivalent units (TEUs) to 2.2 million TEUs per year, or an 83 percent increase, according to Bambang.

To realize this, a 350-meter pier, causeway and stacking yards with a capacity of 400,000 TEUs would be built, he added.

The harbor'€™s draft would also be expanded to a depth of 17 meters to allow ships with a capacity of 5,000 TEUs to enter the port.

'€œOur subsidiary, PT Prima Terminal Peti Kemas, which was jointly established with other state-owned construction firms, PT Wijaya Karya and PT Hutama Karya, will carry out the operation,'€ Bambang told reporters after the signing ceremony at the Transportation Ministry.

'€œWe figure that it is more secure for us to deal with other state-owned enterprises rather than with foreign investors,'€ he said.

Prima Terminal Peti Kemas is 70 percent controlled by Pelindo I, while Wijaya Karya and Hutama Karya each own 15 percent.

The government aims to develop the BICT as the country'€™s main logistics gateway to compete with neighboring Singapore and Johor Bahru in Malaysia, according to Transportation Minister EE Mangindaan. The expansion is part of the government'€™s long-term economic development master plan known as the MP3EI.

'€œBelawan port should become a means to accelerate the country'€™s economic growth, especially in Sumatra because our logistics sector basically relies on sea transportation,'€ Mangindaan said separately.

BICT is located 30 kilometers from Medan'€™s city center in international shipping lanes, according to its website. Export activities include those related to the agricultural sector and forestry products from Sumatra'€™s various provinces.

It also receives imported commodities ranging from flour, soybeans, chemicals, machinery parts and fertilizer. Inter-island container handling includes flour, soap, tea and other food products.

Following the Belawan project, Pelindo I will begin the construction of Kuala Tanjung Port in North Sumatra this year. The construction is projected to be complete in 18 months. Kuala Tanjung Port will be built with a capacity of 1 million TEUs in the first phase.

'€œFor the next three years, we will allocate a total of Rp 5 trillion in capital expenditure, for the completion of Belawan and Kuala Tanjung as well as to procure equipment and plant,'€ Bambang said.

On Wednesday, the port operator launched a host-to-host system, streamlining transaction processes across the 13 ports it manages in a bid to improve port efficiency.

The launch of the host-to-host system was conducted simultaneously with the opening of an automatic gate system at the BICT.

The auto gate will significantly help the port to accelerate entry and exit checks.