Govt to put port, airport projects out to tender soon

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.