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RI, Japan sign $1b loan for Patimban Port
After a four-month delay, Indonesia and Japan signed on Monday a long-awaited development loan agreement worth 118
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fter a four-month delay, Indonesia and Japan signed on Monday a long-awaited development loan agreement worth 118.9 billion yen (US$1.05 billion) to develop Patimban Port in Subang, West Java.
The move will allow the project to set up Indonesia’s new logistics base beginning early next year.
With a 40-year tenure, the loan accounts for 83 percent of the funds needed to develop the first phase of the port project, which will cost in total 144 billion yen or Rp 17.21 trillion ($1.27 billion).
Both countries, meanwhile, have estimated that it will cost Rp 43.5 trillion to completely finish building the port by the 2023 target.
Japan was represented by Japanese Ambassador to Indonesia Masafumi Ishii, while Indonesia was represented by the Foreign Ministry’s director general for Asia, Pacific and Africa, Desra Percaya, during the signing.
Deputy chief of mission at the Japanese Embassy in Indonesia, Kozo Honsei, told a press conference that the loan was binding for Indonesia, meaning that all prerequisites and procurement related to the construction of the port would be subject to Japan’s approval, in addition to its 49 percent shares of the port operatorship.
“Since the beginning, the Indonesian government had asked Japan to use Japanese technology [for the port]. It means that Japan will have the right to put its construction companies up for the port’s tenders,” Honsei said after the signing.
Japan’s loan, nevertheless, would exclude taxes and funds used to acquire land, he added.
With both countries inking the deal, the port’s construction will soon reach financial closure with another agreement slated to be signed by the Japan International Cooperation Agency (JICA) and the Finance Ministry.
As construction could begin early next year, Japan expected to see the car terminal at the port commence operation in March 2019, Honsei said.
The port will be situated roughly 70 kilometers from the Karawang Industrial Estate in West Java, where many Japanese automotive companies have built factories.
Once the first phase of the port’s development is finished, it will have a container capacity of 1.5 million 20-foot equivalent units (TEUs) and 7.5 million TEUs once the second, which is also its final phase, is completed.
JICA senior representative for Indonesia, Tomoyuki Kawabata, said the port was an exceptional project for Japan.
“[The Japanese government] rarely lends more than 100 billion yen to finance a project, so this one is quite big on that scale,” Kawabata said during the same occasion.
Japan and Indonesia are in talks over the port’s operatorship, but have yet to reach a deal, said Honsei.
“[Particularly], the Indonesian government is looking out for options to incorporate private firms into the construction,” he said.
Honsei claimed the Japanese government had not been informed about the involvement of state-owned port operator PT Pelindo II in the project, as well as the fact that the latter had disbursed Rp 2 trillion for the port’s construction to obtain the right to operate Patimban.
Transportation Minister Budi Karya Sumadi said the port may join forces with Indonesia’s busiest international trade gateway, Tanjung Priok Port in Jakarta, and become Southeast Asia’s largest container hub, replacing Singaporean ports, which Indonesian cargo ships have relied on until now.
