Malaysian firm eyes Tanjung Api-Api Port

The Jakarta Post, Jakarta

Malaysian infrastructure firm PT Orient Technology Indonesia will invest some US$250 million for the construction and operation of the Tanjung Api-Api international port in South Sumatra.

As reported by Antara, the plan was conveyed during a meeting between Orient president commissioner Mohd Sopian Rashdi and South Sumatra Governor Syahrial Oesman in Palembang on Friday.

After the meeting, Rashdi said a consultant had recently begun designing the port and construction was expected to commence after the company signed a memorandum of understanding (MOU) with local administrations.

"The construction will start after we sign the MOU with the administrations of South Sumatra and Banyuasin regency. We have projected that construction will be completed in December 2007," Rashdi said.

The Banyuasin administration is involved in the project because the port will be located in the regency, some 90 kilometers south of the South Sumatra capital Palembang.

Banyuasin Regent Amiruddin Inoed said the port was expected to provide a boost to the South Sumatra economy as a whole and the economy of the newly established regency in particular. Banyuasin used to be part of Musi Banyuasin regency.

"Improvement in the local economy will help reduce unemployment in the province, as well as the number of people living below the poverty line," said Amiruddin, adding that the port would help connect the province with international importers and exporters.

South Sumatra is rich in natural resources such as oil, gas, coal, palm oil, rubber and coffee. However, most of these resources have not been fully exploited because of limited transportation facilities such as ports.

In order to send its resources to other provinces, South Sumatra currently relies on Boom Baru Port in Palembang, which has limited shipping capabilities and is not designed for shipping to international destinations.

Alex Kurniawan Edi, chairman of the South Sumatra Association of Rubber Producers, conveyed his association's support for the construction of the new port, which he said would help rubber producers in the province increase their exports.

"The port will enable us to easily export our commodity directly to the United States and Japan. This will in turn help us increase our output," said Alex after a separate meeting with Governor Syahrial.

Aside from benefiting coffee and palm oil producers, the port should also help reduce shipping costs, making all local commodities more competitive in the international market, Alex said.

Currently, export-oriented commodities from South Sumatra have to be shipped to other ports in nearby provinces before being transported to Singapore for shipment to Japan, the United States and Europe.

This forces local producers to shoulder extra costs, making their products less competitive.