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tate-owned port operator PT Pelindo II, also known as the Indonesia Port Corporation (IPC), said that construction of the long-awaited Sorong seaport in West Papua would be further delayed due to land acquisition problems.

Sorong has been designated as a regional hub in the eastern part of the country, linking the regency with other parts of the archipelago, including Bitung, Jakarta, Merauke, Jayapura and Surabaya, as well as neighboring countries, such as Papua New Guinea and Australia.

Once the port starts operating, it is expected to cut logistics costs in the region by 50 percent.

IPC corporate secretary Rima Novianti said on Tuesday that the company had acquired less than 40 percent of the land needed for the port construction and that the company would be unable to begin the project this year as planned.

'€œWe actually wanted to begin construction this year, but we are still waiting for final approval, mainly because we are in the process of acquiring protected forests and land belonging to indigenous people,'€ she told reporters on the sidelines of a discussion.

Rima said that the company was currently waiting for approval from the Forestry Ministry, as well as for the issuance of environmental impact analysis (Amdal) permits to begin constructing the port.

The port, which would have the capacity to receive 500,000 containers of 20-foot equivalent units (TEUs), requires around 7,500 hectares of land with the possibility for future expansion.

Freight costs from Tanjung Priok Port in North Jakarta to Sorong Port could be reduced from US$2,000 per TEU to $375 per TEU when Sorong is completed, according to IPC.

The firm, which is working in conjunction with another state seaport operator, PT Pelindo IV, as well as five shipping companies '€” PT Meratus Line, PT Salam Pacific Indonesia Line, PT Samudera Indonesia, PT Tanto Intim Line and PT Tempuran Mas '€” will be spending Rp 1 trillion ($83.40 million) to build the port.

Pelindo II initially hoped to commence operations by the end of 2014 to help reduce logistics costs in the eastern part of Indonesia. However, land acquisition issues and environmental concerns have forced the company to push back the target to early next year.

'€œWe want to break ground by early next year, but it all depends on the administration process,'€ Rima said. '€œThat is why our focus now lies solely on the construction of the Kalibaru port this year,'€ she added.

In April, the IPC signed an agreement to jointly operate the first container terminal at Kalibaru Port, known as the New Tanjung Priok, which would be the country'€™s largest industrial port.

Operations at the Kalibaru Port are expected to begin in the middle of 2015, while construction of the first contained terminal will be divided into two stages.

The first stage will involve the construction of a terminal with a length of 400 meters and is scheduled to be fully completed by the end of this year. The second stage will extend the length of the terminal to 800 meters and is expected to be completed in May of next year.