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Hopes high for Priok port expansion
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President Joko "Jokowi" Widodo, flanked by his administration's top officials, inspects the Kalibaru Port terminal in North Jakarta on Sept. 13. (Courtesy of Presidential Office/Press Bureau)
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s a former furniture exporter, President Joko “Jokowi” Widodo knows firsthand how bad it is for businesses to have to wait days to load or unload shipments — it adds to uncertainties and logistics costs.
Frazzled by the fact that Indonesia’s logistics competitiveness lags behind neighboring countries, the President has listed port expansion and lowering dwell time — the wait time of goods to load or unload at ports — among his top priorities.
On Tuesday, President Jokowi launched the new Kalibaru Port terminal that expands the nation’s largest trade hub Tanjung Priok in Jakarta, with high hopes that it can cut down costs and make the country more competitive in trade.
“Everyone now has new innovations and builds facilities to support each country’s competitiveness. We don’t want to be left behind. We don’t want to lose in this competition,” Jokowi said during the Kalibaru Port terminal’s inauguration ceremony.
The Rp 12 trillion (US$912 million) port terminal is expected to reduce congestion problems at the busy Tanjung Priok trade hub by increasing its import-export capacity by 1.5 million twenty-foot equivalent units (TEUs) per year from the overloaded capacity of 7 million TEUs.
Located on 32 hectares of land, which is equivalent in area to 32 soccer fields, the Kalibaru port terminal will be able to cater to mega-sized vessels, a capacity beyond that of any other port across the country, and meet international productivity standards. It will also be integrated with online port system Inaportnet, which will expedite clearances and permits to move cargoes online and in turn cut costs.
“The development of a modern port cannot be postponed any more, not only to improve our connectivity between places, but also to support the trade and investment in our country,” added Jokowi.
The terminal launch came just as the President intensified efforts to bring down Indonesia’s stubbornly high logistics costs and make the nation more competitive so as to make trade more business-friendly and affordable to end consumers. Efforts include streamlining export-import permits and easing the domestic flow of goods through scheduled freight liners.
Indonesia’s logistics costs account for 26 percent of the nation’s gross domestic product (GDP), double those of Singapore and Malaysia. It also recently slipped 10 places in the latest World Bank 2016 Logistics Performance Index (LPI) to 63rd of 160 countries surveyed.
With logistics infrastructure and efficiency of clearance processes being some of the most frustrating points for traders in and out of the country, Jokowi has pledged to continue to sink his teeth into port development and bring down dwell times.
As of Tuesday, dwell times stood at more than three days, which is already a decrease from 4.7 days in late 2015, but Jokowi is still not satisfied.
“I want it to drop to between 2.2 days and 2.5 days. Don’t stop at three days. I am not happy yet,” Jokowi said.
Transportation Minister Budi Karya Sumadi acknowledged that there had still been inconsistency in the one-stop integrated service at the Tanjung Priok port. Hence, he has told 16 export-import-related agencies to set up offices in Tanjung Priok within a month to address any issues.
As for industry players, they expected the new Kalibaru Port terminal to help improve the country’s logistics performance, said Indonesian National Shipowners Association (INSA) chairwoman Carmelita Hartoto.
“We just ask the operator to maximize its utilization, provide good service and offer competitive fees for container handling,” she added.
The Kalibaru Port terminal is just one part of the first phase of development of the overall New Priok Port expansion, which will see two phases of development that are to be in full operation by 2024 with an overall capacity of 19.5 million TEUs per year. A joint venture between state-run port operator Pelindo II and a Japan-Singapore consortium handled the project under PT New Priok Container Terminal 1 (NPCT1).
Key features of Kalibaru Port terminal
* Indonesia’s largest port terminal
* Biggest port infrastructure project at present
* Part of first phase of New Priok Port expansion
* Terminal capacity: 1.5 million TEUs (vs. entire Tanjung Priok Port capacity of 7 million TEUs)
* Project value: Rp 12 trillion
* Land area: 32 hectares
* Dock length: 450 meters
* Draft: 16 meters
* Can accommodate 150,000 tons deadweight vessels consisting of 15,000 TEUs (facilities not available in any other of the country’s ports)
