Shipping lines invited to invest in seaport terminals

The Jakarta Post, Jakarta

After failing to entice investors in the planned Bojonegara seaport in Banten, the government has decided to build the port itself and then invite shipping lines to invest in the seaport's terminals.

Office of the State Minister of State Enterprises logistics and tourism head Ferdinand Nainggolan said on Thursday that the government had spent Rp 20 billion (US$2.4 million) building the port that would be opened by the end of July.

Earlier this year, the government scrapped a deal with Hong Kong-based Hutchison Port Holdings and Bimantara Group due to a financial dispute.

Later in April, it invited new investors to develop the Bojonegara seaport but it appears no investor closed a deal with the government.

Ferdinand said the government decided to build the port with its own money and later invited 'strategic partners' to complete it. Earlier, he estimated the port would cost at least US$350 million.

"The government will invite shipping lines to use the port's terminals. We are still the one who owns and manages the port, but the lines are those who manage the terminals they use," he said after a hearing with the House of Representatives Commission V for trade and industry.

"If you go to Taiwan's port, you will see its terminals managed by shipping lines like Evergreen," he said. "So the government will do the same, inviting liners like Maersk and CGM- CMA."

The planned Bojonegara seaport will serve as a deepwater port capable of accommodating large vessels, and have a capacity to hold at least 4,000 20-foot containers.

Such a seaport allows exporters in Indonesia to deliver their shipments directly to overseas destinations such as Europe and America without having to unload and reload the shipment in Singapore or Malaysia.

The latest report from the government shows that 75 percent of the country's overseas shipments have to stop in ports in those countries.

In his presentation to the House, Ferdinand cited a report saying Indonesia was losing around US$1.09 billion per year for double-handling costs in Singapore and Malaysia.

Previously, he estimated losses to Indonesian exporters at US$700 million.

Bojonegara seaport is a part of the government's plan to make state-owned seaport operators -- PT Pelindo I, II, III and IV -- more profitable by improving the facilities and the infrastructure of 10 ports across the archipelago. Rather than function as passenger ports, they will mainly serve as trading seaports.

The Office of the State Minister for State Enterprises, which controls the four operators, also plans to merge the four companies to boost efficiency.

However, the plan has encountered objections particularly from businesses in eastern parts of Indonesia and the State Minister for the Acceleration of Development of Eastern Indonesia Manuel Kaiseipo.

The latter feared the merged operator would mainly focus on making profits, abandoning its public service role.