Govt seeks new investors for seaport project

Govt seeks new investors for seaport project

Rendi A. Witular, The Jakarta Post, Jakarta

The government is to invite new investors to develop the
Bojonegara seaport in Banten province after it scrapped a
previous deal with Hong Kong-based Hutchison Port Holding and
Bimantara Group due to a financial dispute.

Deputy for Logistics and Tourism at the Office of State
Minister of State Enterprises Ferdinand Nainggolan told The
Jakarta Post on Monday that the government would open a tender
process for new strategic investors in 2005.

"We will open the door to (new) investors in 2005 after
Pelindo II (the state-owned seaport operator) has concluded the
buying and cleaning of the land needed for the port," said
Ferdinand, adding that the project was estimated to cost at least
US$350 million.

Thus far, Pelindo II had only managed to clear around 120
hectares out of the 1,200 hectares needed for the seaport, which
is projected to have an installed capacity of 3 million twenty-
foot equivalent units (TEUs) of containers.

Ferdinand explained that the government, through Pelindo II,
had decided to back down from the Hutchison-Bimantara consortium
in February this year, because neither Hutchison nor Bimantara
had injected any money for the project within the agreed time
frame.

The consortium won the tender to develop the Bojenegara
seaport in 1997, but the government had to freeze the project
after the country was hit by the 1998 economic crisis.

The government revived the project in 2002.

Pelindo II owned a 30 percent stake in the consortium company
PT Teluk Banten, while Hutchison owned the remaining 45 percent
and Bimantara 25 percent.

The government is in dire need of a deepwater port capable of
accommodating mother vessels with capacities of at least 4,000
TEUs of containers.

Bojonegara, along with Tanjung Priok in Jakarta and Kalilamong
in Surabaya, is expected to accommodate such vessels so that
Indonesian exporters could save time and money as the facilities
would allow the ships to go directly from the ports to their
overseas destinations.

Currently, about 75 percent of the country's shipment must
pass through Singaporean or Malaysian ports to be loaded onto
larger ships.

The government has roughly calculated that Indonesian
exporters lose at least Rp 6.3 trillion annually in foreign
exchange revenue by making transshipment stops in Singapore and
Malaysia.

The development of Bojonegara seaport, which has a water depth
of 16 meters, was also based on the fact that the existing port
in Tanjung Priok was considered too small and could no longer be
expanded to accommodate future cargo load volumes.