Indonesia brings foreign partners on board to expand Jakarta port

Indonesia brings foreign partners on board to expand Jakarta port

HONG KONG — Indonesia’s largest port operator Pelabuhan Indonesia II (IPC) will partner with PSA International, Japanese investment company Mitsui & Co. and NYK Line to construct and operate a container terminal at Jakarta’s Tanjung Priok port.

The new terminal will be developed and operated by New Priok Container Terminal One (NPCT1), the four investors said in a joint statement. IPC will be the majority shareholder with 51 percent.

Jakarta’s Tanjung Priok Port is the most important and largest port in Indonesia, handling most of the country’s international container traffic. But rapid economic growth has been accompanied by a rapid increase in container traffic that has swamped the available terminal capacity.

“To support the vibrant trade, there is an immediate need to increase the port capacity and handling capability,” the statement said. No mention was made of when the terminal will come online, although construction has started.

The new terminal will have an annual handling capacity of approximately 1.5 million 20-foot containers, an overall berth length of 929 yards, and a 52-foot draft upon completion, allowing the terminal to accommodate the mega container vessels operating on the Asia-Europe trade. 

NPCT1 will also pursue the efficient reduction of emissions, and energy conservation and environmental protection activities as a "Green Terminal" by exploring the use of environmentally friendly facilities such as "cold ironing”.

Indonesia is seeing unprecedented interest in its ports. As a huge archipelago, the Southeast Asian nation does not have enough dedicated container facilities and terminal berths. The National Port Masterplan was released two years ago that outlines where the ports will be expanded or required up until 2030. The largest facilities will be developed around Jakarta on the western side of Java island, and at Indonesia’s second largest city of Surabaya on the eastern end.

The National Development Planning Board (Bappenas) has launched a “marine highway” plan that intends to develop new routes connecting the country’s east and west with scheduled maritime traffic that is all charged with a fixed rate. 

The marine highway is expected to boost connectivity in Southeast Asia’s largest economy and reduce the country’s high logistical costs that hurt the competitiveness of local products. Logistics costs are currently 23.5 percent of the gross domestic product and the plan will reduce this to 19.2 percent by 2019. While an improvement, this is well above the 8 percent of GDP typical for developed nations.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.