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Jakarta Post

Pelindo II partners with China to develop Batam port

  • Nurfika Osman

    The Jakarta Post

Jakarta   /   Fri, May 3, 2013   /  01:05 pm

State port operator Pelindo II, also known as Indonesia Port Corporation (IPC), will at the end of this year start developing the Tanjung Sauh Port on Batam Island in collaboration with its partner, Chinese Merchants Group.

Construction is estimated to cost about Rp 5 trillion (US$515 million) and will be done in several phases.

IPC president director Richard Joost Lino said the Jakarta-headquartered port company and its Chinese partner would collaborate on the construction as well as in the operation of the Batam port.

'€œWe are currently finalizing the project details with our partner from China and hope to complete it within three months. The port will become an international hub in western Indonesia,'€ Lino told The Jakarta Post, adding that details of the project would be developed in the second half of 2012.

In the first phase, a port with a total capacity of 4 million 20-foot-equivalent units (TEUs) will be built.

'€œAs we expect to start construction at the end of the year, the first phase will be finished by the end of 2015 at the earliest,'€ he said.

In the future, the firm wants to expand the port into a 15 to 20 million TEUs capacity facility as Batam plays a vital role in the shipping and trade sectors.

He emphasized that Tanjung Sauh would help reduce logistics costs, particularly in Sumatra and West Kalimantan, the nearest regions.

Meanwhile, Pelindo I in Medan, North Sumatra, also plans to develop the city'€™s Kuala Tanjung Port into a major port that would connect the country'€™s western region to the world.

Construction of the port will be managed by state port company Pelindo I, which already manages ports in Sumatra.

'€œPlease develop [any] ports. The market will determine [their preference],'€ Lino said, commenting on Pelindo I'€™s plan.

In addition, Lino said Pelindo II would sign a detailed agreement with Japan'€™s Mitsui & Co., Ltd. regarding the June operation of Kalibaru'€™s first container terminal in North Jakarta, which is the country'€™s largest port.

'€œThe composition of shareholders and the concession of the operation are among things that will be included in the agreement,'€ he continued.

According to IPC corporate secretary Yan Budi Santoso, the agreement will stipulate that Mitsui supply the cranes and any other equipment the terminal needs until May 2014.

Both companies previously signed a memorandum of agreement (MoA) in New York, the US, at the end of February.

The first container terminal will have a total capacity of 1.5 million TEUs.

Regarding Kalibaru'€™s second and third terminals, Lino said that representatives of 16 foreign companies interested in investing, such as Hutchison and Dubai Port World, would visit next week.

He said that the tender for both terminals would be opened immediately because construction should begin early next year.

Moreover, he said the company would team up with the World Bank to help assess problems in the country'€™s port infrastructure and shipping areas in a bid to effectively reduce logistics costs in the long run.

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