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Oversight committee defends JICT contract extension
Despite recent controversy, the Pelindo II Oversight Committee has said that state-owned port operator Pelindo II, also known as the Indonesia Port Corporation (IPC), acted transparently when it renewed its contract with Hong Kong-based Hutchison Port Holding (HPH) last year
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espite recent controversy, the Pelindo II Oversight Committee has said that state-owned port operator Pelindo II, also known as the Indonesia Port Corporation (IPC), acted transparently when it renewed its contract with Hong Kong-based Hutchison Port Holding (HPH) last year.
The oversight committee consists of several prominent figures such as former deputy Corruption Eradication Commission (KPK) chairman Erry Riyana Hardjapamekas, economist Faisal Basri, Independent Research and Advisory Indonesia (IRAI) founder Lin Che Wei and Transparency International Indonesia (TII) secretary-general Natalia Soebagjo.
The committee was established in 2013 to monitor the construction and operation of Kalibaru Port in Jakarta and Pelindo II's contract with HPH.
'The contract renewal process was conducted transparently and in an accountable manner, which means it was not secretive and [Pelindo II] had reported the process to all stakeholders in charge of decision making,' Erry said in a press conference on Monday.
As reported, Pelindo II extended HPH's rights to operate JICT for another 20 years in 2014. HPH's concession to operate JICT'which is a joint venture between Pelindo II and HPH established in 1999'would end by 2019.
Under the agreement, Pelindo II has increased its stake in JICT to 51 percent from the previous 49 percent and HPH will have to pay US$250 million in advances to Pelindo II. Pelindo II, which was looking to speed up the construction of Kalibaru Port in North Jakarta, has also raised HPH's rent from $60 million to $120 million per year.
The committee's spokesperson, Faisal Basri, also said that the down payment from HPH was highly beneficial for the public since it would be used to develop existing ports managed by Pelindo II.
Port development would increase freight traffic and eventually decrease logistics costs, Faisal said in a written statement.
'In the end, it is the public who will benefit [from this agreement],' Faisal said.
Last month, employees of PT Jakarta International Container Terminal (JICT) staged a rally demanding the annulment of Pelindo's decision to lay off two of its employees and cancel the company's decision to award a contract to Hutchison.
The workers' union said that the contract renewal had caused state losses and violated the law, as it was renewed five years before the contract was due to end.
The Transportation Ministry's director general for sea transportation, Bobby Mamahit, previously also said that Pelindo II should first secure permission from the ministry to renew the contract.
Bobby said renegotiations could not take place before the minister issued a green light for an extension.
Erry, however, said that the committee only considered the significance of Kalibaru Port and JICT as the 'locomotive' in moving the country's port development forward.
'Regarding the law, Transportation Ministry and State-owned Enterprises Ministry should discuss the matter and make it clear to Pelindo II,' he said.
