Big container terminals told to shut down

Sari P. Setiogi, The Jakarta Post, Jakarta

The anti-monopoly agency (KPPU) has concluded that the PT Jakarta International Container Terminal (JICT) and Koja Container Terminal have violated the existing monopoly law.

KPPU said that both companies, which operate the two largest container terminals in Tanjung Priok, North Jakarta should terminate their operations.

The agency also demanded the resignation of Wibowo S. Wirjawan from his position as the president of JICT or PT Ocean Terminal Petikemas, which is one of the shareholders of Koja.

In its verdict unveiled on Monday, KPPU said JICT and Koja, which are both controlled by state-owned port operator PT Pelindo II and Hong Kong-based Hutchison.

In JICT, which operates the Tanjung Priok container terminal, Pelindo controls 48.9 percent the company's shares, while Hutchison has 51 percent through its subsidiary Grosbeak Pte. Ltd. In Koja, Pelindo has a 52 percent stake, while Hutchison has the remaining 48 percent through its subsidiary Ocean.

Reading the verdict, KPPU's member Erwin Syahril said through the cross-shareholding, Hutchison and Pelindo controlled 75 percent of the container market in Tanjung Priok, not only opening up opportunities for unfair competition to smaller competitors, but also hurting the interest of customers.

JICT and Koja used their domination to threaten businesses to use their service or face consequences at overseas terminals, Erwin told The Jakarta Post.

"The companies sent letters to (potential) customers forcing them to use the terminals operated by either JICT and Koja. Otherwise they will not be served at other container terminals abroad," said Erwin.

Hutchison is a global leader in the terminal port business, operating about 35 container terminals worldwide.

KPPU gave JICT and Koja 14 days to respond to its verdict.