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Expansion projects on track: IPC
State-owned operator PT Pelabuhan Indonesia II (Pelindo II), also known as the Indonesia Port Corporation (IPC), is to forge ahead with a port expansion plan despite the countryâs economic slowdown
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tate-owned operator PT Pelabuhan Indonesia II (Pelindo II), also known as the Indonesia Port Corporation (IPC), is to forge ahead with a port expansion plan despite the country's economic slowdown.
IPC finance director Orias Petrus Moedak said that the construction of new ports in Kijing in West Kalimantan, Tanjung Carat in South Sumatra and Sorong, West Papua, as well as the development of Muara Jati port in Cirebon, West Java, a car terminal at Tanjung Priok port in Jakarta and the ongoing New Priok project would not be affected by the economic slowdown.
The IPC, Orias said, had secured US$1.6 billion from the issuance of global bonds in April to finance the projects.
'Financing wise, we're ready. As long as there're no problems with the permits, it should go according to plan,' he said, adding that the company would use its own funds to finance the new projects.
Orias said that the company, which has assets amounting to Rp 40 trillion, had chosen a global bond issuance to finance the projects in light of domestic banks' lending limitations.
The total investment for the construction of the ports and the car terminal is Rp 13.31 trillion, while the ongoing New Priok Project, which commenced in 2014, will need about Rp 24.81 trillion.
IPC director RJ Lino stressed the importance of the development and the construction of the new ports.
Cirebon's Muara Jati port, he said, was intended to reduce the flows of goods from West and Central Java into Tanjung Priok.
Meanwhile, the new car terminal, valued at Rp 1.16 trillion, will boost capacity for passenger cars to 750,000 units.
The construction is part of efforts to align with the government's plan to boost the economy and shape Indonesia into a maritime axis.
'Our bonds attracted investors because [our plan] aligns with the government's vision,' Orias said.
The finance director also urged the government to exempt the company from a ban on the use of US dollars in transactions, as the company, he said, charged unloading costs in dollars, and depended on foreign lending.
'An estimated 30 percent of our revenue is in dollars. This year we received $200 million and next year we'll probably get $300 million,' Orias claimed.
The company has seen a slight decrease in profits as a result of the country's slowing economy.
The IPC recorded a 1 percent drop in profits to Rp 626.5 billion in January to May 2015 from the same period last year, while its revenue dropped 7 percent to Rp 2.59 trillion, on the back of a falling rupiah and slowing global commodity demand. (fsu)
