Indonesian Port’s Expansion to End Singapore’s Domination

Source: http://www.thejakartaglobe.com/business/indonesian-ports-expansion-to-end-singapores-domination/502703

 

The Jakarta Globe | March 05, 2012

 

North Jakarta’s Tanjung Priok port should be able to handle nearly double its current quantity of intermodal shipping containers when a Rp 17 trillion ($1.9 billion) revamp is completed by 2017, says Richard J. Lino, the president of state port operator Pelindo II.

Once the project is completed, it may further reduce the number of shipments from Jakarta that head to Singapore before going to other destinations, Richard said.

The government plans to give Pelindo II the contract to build three container terminals and two fuel depots in North Kalibaru, part of the Tanjung Priok port, after the prequalification tender process involving five private bidders was scrapped in January.

The area surrounding the new facilities will be renamed “New Priok.” The total investment in construction was estimated by Richard at between Rp 16.5 trillion and Rp 17 trillion.

Richard said on Monday that New Priok will increase Tanjung Priok’s overall container handling capacity to 11 million 20-foot equivalent units (TEUs) in 2017 from 5.9 million TEUs last year. The first container terminal is expected to start operating in 2014.

Recent improvements and expansion at Tanjung Priok port, Richard said, had reduced shipments to Singapore from Jakarta to just 18 percent of total traffic of goods that passed through Tanjung Priok, from 70 percent in 2008.

It has been common practice by international traders in the past to use ports in Indonesia, including Tanjung Priok, as feeders for Singapore, a global hub for cargo.

Poor infrastructure, which has caused rising costs for the distribution of goods in the archipelago nation, has been blamed for modest economic growth and deterring foreign investment.

The government is undertaking a plan to build more ports to boost economic growth.

In the World Bank’s Logistics Performance Index, which rates countries’ systems for the distribution of goods, Indonesia ranked 75th out of 183 countries in 2010.