Private seaport

The Bojonegara seaport project in West Java, designed to be a new international freight gateway to Indonesia, will contribute greatly toward facilitating cargo flows and accelerating this country's industrial development. Needless to say that in the current era of economic globalization, seaports are much more than simply transit points for merchandise. They provide complete logistical services vital for manufacturing operations and product marketing.

It is therefore imperative the government ensures that the project runs smoothly and efficiently. Since the project is the first green-field harbor to be built in two decades and the first to be financed and managed by private companies, it has become a test case for private investors in other port projects.

The capital costs of building the port should be monitored closely because inefficient procurement of goods and services would affect the price competitiveness of its eventual services. Although the project is a private venture, the government plays a pivotal role in its cost management. Because the port is a multi- faceted operation involving many private and government players, the performance of the government as the project's coordinator will influence the efficiency of investment in the port. Government support is also needed to build supporting infrastructure, especially the feeder services to Bojonegara as the main port.

The Bojonegara port is being planned, designed and built from scratch. Its developers can learn great lessons from all the mistakes which were made at the country's largest port, Tanjung Priok in Jakarta, which is notorious as one of the most inefficient ports in Southeast Asia. A port must always be regulated and supervised by the government, but how the authority and responsibility of this port are reconciled between the port administrator, as the government representative, and the port manager will determine its operational efficiency.

It is essential that the new port is designed from the outset as a modern facility using an electronic data interchange (EDI) system for its management and operations. This requires the procurement of data processing equipment and, more importantly, design of software and the training of skilled operators. The EDI system will quickly transmit data from the shippers, consignees, ocean carriers, freight forwarders, customs services and other agents involved in logistical services. Computerized information and management systems will enable port users to electronically submit their declarations, plans, manifests and other services that are required by port management 24 hours a day.

We believe the port's investors are fully aware of the importance of using the latest cargo handling and information processing systems. This is evident in their plans, which have, right from the beginning, involved experienced port-management companies as shareholders in the project. The foreign partners will help accelerate the training of personnel and set up a suitable management team.

Obviously, it is irrelevant to compare the service fees to be charged by the Bojonegara port with those of state-run harbors because of the differences in their financing structures. For sure, the fees to be charged by Bojonegoro will be higher than those at Tanjung Priok for example. But the bottom line remains positive because the higher fees will be offset by faster handling services and better delivery schedules. Experience at Tanjung Priok has shown that the costs of congestions and delays on port users are often much higher than the official fees they pay.