Port mismanagement prompts govt to mull foreign ownership

Zakki P. Hakim, The Jakarta Post, Jakarta

The many extra expenses passed on to exporters and importers at Indonesia's ports are mainly attributable to time-consuming services, illegal fees and the relatively high Terminal Handling Charge (THC), a minister said on Tuesday.

Minister of Trade Mari E. Pangestu stated during an impromptu visit on Tuesday to Tanjung Priok port and the Jakarta International Container Terminal (JICT), that the government was working to significantly slash those extra costs.

"The high cost of export and import processing has substantially reduced our competitiveness on the international market," said Mari.

The sluggish container processing, which is a key contributor to the high cost of port handling here, consequently requires exporters and importers to pay more for every container held up by port officials, she said.

According to Mari, the problem was basically a result of insufficient infrastructure, poor systems, a lack of professional management and outdated technology at the ports.

Moreover, as witnessed during the visit, customs officials at Tanjung Priok port had to do most of their routine inventory checks manually.

To help resolve the problems, "We are now assessing all ports in the country, to find out which ports are implementing best practices, which can then be adopted at other ports," Mari said, adding that the government would not rule out inviting foreign investors to help improve local ports.

She, however, did not give any recommendations about curbing illegal fees, reducing the expensive THC or a host of other issues that inflate the costs.

"We are still studying the steps that needed to be taken," she said.

Meanwhile, Indonesian Exporter Association (GPEI) secretary- general Toto Dirgantoro said Tanjung Priok could only process an average of 18 containers an hour.

Meanwhile, the more sophisticated JICT was able to process 26 containers per hour on average, Toto said.

JICT is a joint venture firm, of which international port operator the Hutchinson Ports Holdings (HPH) group controls 51 percent of the shares. The remaining 49 percent is owned by state owned port operator PT Pelabuhan Indonesia (Pelindo) II.

JICT president director WS Wirjawan said that his firm was investing a further US$10 million this year to expand the capacity of its handling field to store containers, from the current 2.4 million TEUs (twenty-feet equivalent units) to 3 million TEUs.

HPH is aiming to have at least seven giant container carriers or "mother vessels" at the JICT by the end of the year.

Wirjawan said that having such mother vessels at the JICT showed that the port was capable of handling very large carriers, meaning that Jakarta would be open for direct-line services to and from Europe, North America or Australia without having to transfer to larger ships in Singapore.

He said that at least 60 percent of Indonesia's exports at the moment had to stop over in Singapore, thus putting additional costs on the country's goods in the international market.