Malaysian firm eyes Tanjung Api-Api Port

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.