Govt to invite investors to upgrade 18 state-run ports

Rendi A. Witular, The Jakarta Post, Jakarta

The government will soon invite investors to help it upgrade 18 state-run ports in the country in a planned revenue-sharing scheme, the Minister of Transportation says.

The ports, which serve national inter-island traffic were located in Papua, Sumatra, Kalimantan and Sulawesi, Hatta Radjasa told The Jakarta Post recently.

"We will soon invite the private sector to expand the capacity of these 18 feeder ports. The ministry expects that by 2010, each port will have a capacity to manage up to 500 twenty-feet equivalent units (TEUs) per day," said Hatta.

At present, some of ports have little or no capacity to manage containers, while only a handful of others can manage up to 200 TEUs per day.

Hatta said the government would initially spend at least Rp 200 billion (US$20.4 million) this year to help upgrade the facilities of those ports, constructing new berths, widening others and dredging the seabed around ports to allow larger vessels access.

Private investors would be invited to provide cranes for managing containers, trucks, information technology systems, and pooling stations, he added.

"Several bottleneck problems faced by smaller ports have forced the government to seek immediate solutions by requesting the participation of businesspeople," Hatta said.

Hatta said he could not estimate the total investments needed from the private sector, since the upgrades would be on a port-by-port basis.

Shipping operators grouped in the Indonesian National Shipowners Association (INSA) have called for massive improvement in the management of ports, as a jams in both local- and international-scale ports have caused costly inefficiencies.

INSA said inefficiencies at ports cost the industry US$20 million a year it said.

Last year, Indonesia's ports managed some 6.6 million TEUs with the figure expected to grow by at least 10 percent this year in accordance with estimated higher economic growth that could reach 6 percent.

The 18 upgraded ports would be tasked with feeding container vessels heading to larger ports with enough capacity to serve overseas-bound larger ships.

Up to now, there are only seven ports in Indonesia that can accommodate overseas-bound vessels.

They are Belawan port in North Sumatra, Bitung port in North Sulawesi, Tanjung Priok port in Jakarta, Tanjung Perak port in East Java, Pontianak port in West Kalimantan, Makassar port in South Sulawesi and Ambon port in Maluku.

The Tanjung Priok port is the country's largest with the capacity to manage up to 958 TEUs a day and 11 container vessels at the same time. The remaining six ports can only accommodate a maximum of 400 TEUs and can service between two and eight vessels at the same time.

Ports to be upgraded:

Sulawesi Kalimantan - Palu - Banjarmasin - Gorontalo - Samarinda - Kendari - Balikpapan - Ternate - Tarakan

- Bontang Papua - Sorong Sumatra - Jayapura - Panjang - Timika - Bengkulu - Merauke - Jambi and Riau

- Palembang

- Padang

Source: The Ministry of Transportation