Importers raise concerns about Pelindo-JICT ruling

Importers raise concerns about Pelindo-JICT ruling

The Jakarta Post, Jakarta

The Indonesian Importers Association (Ginsi) has expressed
great concern over the recent ruling by the Business Competition
Supervisory Commission (KPPU) on container terminal operations at
Tanjung Priok port, saying that the verdict could affect the flow
of cargo through the country's largest seaport.

Ginsi chairman Amiruddin Saud said on Tuesday that the
antimonopoly watchdog's ruling -- that state-owned port
management company PT Pelindo II and PT Jakarta International
Container Terminal (JICT) had been engaged in unsound business
practices -- showed the watchdog failed to see port operations in
the context of national interests.

"Indonesian exporters and importers urgently need an efficient
central seaport that can provide direct freight services to final
destinations at various international points without
transshipment in Singapore or Malaysia," Amiruddin said.

The KPPU annulled on Jan. 5 the authorization agreement
between PT Pelindo II and JICT for operating container terminals
at Tanjung Priok port, declaring that the deal had created unfair
competition for other freight handling companies.

The two companies are appealing the ruling.

Pelindo II owns 49 percent of JICT, while Hong Kong-based
Hutchison Port Holdings, an international container terminal
operator, holds the remaining 51 percent.

Amiruddin said the antimonopoly watchdog could not simply
annul the contract between Pelindo II and JICT, as it was part of
the government's 1999 privatization program for PT Pelindo II.

The government, strapped for cash and desperate for new
investment to modernize the country's largest seaport, decided in
early 1999 to sell part of Pelindo II.

However, since existing laws do not allow Pelindo II, as the
owner of Tanjung Priok port, to be privatized, the government,
under then-president Habibie, set up JICT as a wholly owned
subsidiary of Pelindo II.

JICT was later granted a 20-year lease to operate container
terminals at Tanjung Priok, and was subsequently offered to
strategic investors through a competitive bid.

Hutchison won 51 percent shares in JICT through its Singapore
subsidiary, Grosbeak Pte Ltd.

"Unilaterally annulling the contract between JICT and PT
Pelindo II would severely damage investor confidence in Indonesia
and hinder further development of Tanjung Priok port," Amiruddin
said.

He added that exporters and importers badly needed an
international-standard seaport, especially after last year's
establishment of the ASEAN Free Trade Area (AFTA).