Mike King, Special Correspondent | Mar 15, 2012 10:07AM EDT
The controversial state-owned winner of a contract to expand facilities at Indonesia’s Tanjung Priok says container handling capacity will double by 2017.
Pelindo II will invest $1.9 billion to build three container terminals in the North Kalibaru area of Tanjung Priok port, Indonesia’s main port gateway, by 2017, doubling capacity from its current 5 million TEUs annually.
A prequalification process tender to identify private bidders for the expansion of the congested port near Jakarta was scrapped in January after government ministers made it clear state-owned operator Pelindo II would be awarded the contract.
Tanjung Priok, which suffers from port access and berth congestion and has few mainline calls on east-west trades because of capacity constraints, handled 5.8 million TEUs in 2011, up 23 percent from 2010.
A spokesman for APM Terminals said it retained its interest in operating facilities in Indonesia, including at Tanjung Priok.
“We’re watching the developments closely at this time to see what the future holds,” he said.
APM Terminals estimated last year that, with five of Indonesia’s six leading container ports currently operating above capacity levels and suffering from congestion, a minimum of 6 million to 7 million TEUs of new capacity would be required by 2015, and a further 15 million TEUs by 2020.
Indonesia ranked 75th in the World Bank’s 2010 Logistics Performance Index, far below regional rivals such as Thailand, Malaysia and the Philippines. The Indonesian Logistics Association estimates the country’s logistics shortcomings, primarily a lack of infrastructure, account for approximately 25 to 30 percent of GDP.
According to Pelindo II, the new Kalibaru facilities will reduce reliance on feeder ships via Singapore by doubling channel access to 300 meters and offering draft alongside berths of up 20 meters, 6 meters deeper than current depths and adequate for the largest container vessels.
Pelindo II increased its net profit by 33 percent in 2011 to $175 million as revenue rose by more than 40 percent.
Pelindo II is also building a port in West Papua, a bulk terminal at Ciwandan, Banten, and a car terminal at Priok port.
Contact Mike King at michael@borderline.eu.com.