Thu, 12 Aug 2010

From: The Jakarta Globe

By Dion Bisara & Irvan Tisnabudi
Jakarta. The government is planning to pour Rp 22 trillion ($2.46 billion) into expanding the Tanjung Priok port in a bid to speed up the movement of goods.

“We will expand the port with four more terminals and hope the groundbreaking on the first one will happen by the end of this year,” Coordinating Minister for the Economy Hatta Rajasa said on Wednesday.

The expansion is expected to take five or six years.

Located in North Jakarta, Tanjung Priok handles 50 million metric tons of cargo a year. The port is operated by state-owned Pelabuhan Indonesia II (Pelindo II).

“This expansion is needed in order to cope with the increasingly heavy container traffic in and out the port,” Hatta said.

“Nowadays, ship capacity is moving toward 5,000 TEUs [twenty-foot equivalent units] per vessel. We have to anticipate that or we will be left behind.”

If each new terminal is capable of handlings 1.5 million TEUs, the port capacity will increase to 10 million TEUs from the current 4 million, according to Pelindo II president director RJ Lino.

Despite the ambitious plans, the government is still hashing out funding details.

“That will be discussed and finalized by the finance and state enterprise ministers,” Hatta said.

Finance Minister Agus Martowardojo said funding discussions would be held next week.

As well as expanding Tanjung Priok, the government still also plans to eventually open a new port in the Jakarta area.

“We have agreed to have that new port open by 2025, east of Jakarta. For now, we still have to acquire the land,” Lino said.

But Sofjan Wanandi, chairman of the Indonesian Employers’ Association (Apindo) said the government had been promising a new port for years, without making any progress on it.

Still, he said Apindo hoped the government would make good on its claim because Tanjung Priok was chaotic and overcrowded and caused a bottleneck in export movements.

“Jakarta needs one more port,” Sofjan said.

“I think the effort to make Tanjung Priok more efficient will still not be enough to improve export activities because of how crowded it is.

“But any effort by the government to reduce our nation’s high-cost economy is a good idea. I hope it acts swiftly.”