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).