Private seaport

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.