Govt to put port, airport projects out to tender soon

Rendi A. Witular, The Jakarta Post, Jakarta

As a follow up to January's Infrastructure Summit, the Ministry of Transportation will start the tender processes in March and April for three projects worth over Rp 8 trillion (US$864.9 million).

The projects are a new port in Jakarta, a new airport in the North Sumatra capital of Medan and the expanding of Soekarno- Hatta International Airport in Cengkareng, which also includes the development of cargo handling facilities and a rail link.

"These tenders represent the next step after the Infrastructure Summit last month," Minister Hatta Radjasa told a press conference on Wednesday after a meeting with Vice President Jusuf Kalla.

Port and airport projects are among the government's top priorities for upgrading the country's woefully inadequate infrastructure. During the two-day summit on Jan. 17 and Jan. 18, the government offered 91 infrastructure projects worth US$22.5 billion to domestic and overseas investors.

Hatta said the projects were necessary to reduce congestion in the distribution chain, which significantly increased the cost of doing business here.

The minister acknowledged the existence of a dispute surrounding the Jakarta New Port project, also known as the East Ancol Seaport project. Therefore, Hatta said, the ministry would immediately call upon the parties involved to settle their differences amicably and to jointly develop the project as soon as possible.

The dispute involves port operator PT Pelindo II and the Jakarta administration, and concerns who has the authority to manage ports in the capital. The city administration bases its arguments on the Local Autonomy Law, which contradicts other legislation stipulating that Pelindo has the sole authority to manage ports nationwide.

"I have urged Pelindo and the administration to set up a joint venture to develop the port in order to resolve this problem. The government needs the project to be completed as expeditiously as possible," said Hatta.

It is estimated that the new port will cost around Rp 4.4 trillion, with the first phase involving the construction of facilities for handling automotive products.

The second key project is a Rp 2.71 trillion scheme to expand the capacity of Soekarno-Hatta airport -- which includes the expansion of Terminal I (domestic flights) at a cost of some Rp 1.6 trillion -- a Rp 430 billion development of cargo handling facilities, and the construction of a railway connecting the airport to Kalideres bus terminal at a cost of Rp 675 billion.

The third project is the construction of a new airport in Medan. It is expected that the new airport -- which will replace the existing Polonia airport -- will cost Rp 2.3 trillion.

The government has decided not to upgrade Polonia airport due to its location at the heart of Medan, the country's third largest city.

The new airport is expected not only to support economic growth in North Sumatra but also to serve as a catalyst for enhanced economic cooperation between Indonesia, Malaysia and Thailand in what is referred to as a growth triangle.