Indonesia Develops 14 Modern Ports to Support ASEAN Single Market

20 July, 2011 | Source: The Jakarta Post

The government is working on a large-scale project to develop 14 ports as international harbors throughout the country in preparation for the establishment of the single ASEAN market by 2015.

 

Transportation Deputy Minister Bambang Susantono said on Wednesday in Jakarta the modernization of the ports would be needed to improve the connectivity with other members of the Association of Southeast Asian Nations (ASEAN).

The project will include Belawan port in Medan, Dumai port in Riau, Panjang port in Lampung, Tanjung Priok port in Jakarta, Tanjung Emas port in Semarang, Tanjung Perak in Surabaya, Balikpapan port in East Kalimantan, Banjarmasin port in South Kalimantan, Makassar port in South Sulawesi and Sorong port in West Papua.

Bambang said the government was still calculating the amount needed for the project.

“We will partly make use of the ASEAN Infrastructure Fund [AIF] to finance the projects,” he said, adding that beside the intra-ASEAN collected funds, Indonesia would possibly use additional funds enabled by bilateral commitment from interested countries such as Japan, China and South Korea.

Japan, for example, was willing to provide US$200 billion to finance a number of projects under the ASEAN Connectivity Master Plan declared in the 17th ASEAN Summit on Oct. 28, 2010, in Hanoi, Vietnam, Indonesian Ambassador to ASEAN Ngurah Swajaya said during last year’s event.

According to estimates from the World Bank, ASEAN needs to pour in more than $7.5 trillion in overall regional and national infrastructure to realize the connectivity.

Bambang said the government would also invite the private sector to develop the ports under the public-private partnership (PPP) program.

“For example, Pelindo II has expressed its interest in building a port in Sorong,” he said.

Recently, state seaport operator PT Pelindo II said it would lead a consortium consisting of state operator PT Pelindo IV and five shipping companies to build a Rp 800-billion (US$93.6 million) container port in Sorong, West Papua.

“We are designing an appropriate strategy to realize the plan. We open opportunities as wide as possible for interested parties,” he said, adding that the port authority would carry out the bidding process for ports outside Pelindo management.

Bambang said the realization of the plan would significantly reduce the logistics cost. Recently, the Indonesian Logistics Association (ALI) said Indonesia’s logistics cost, representing around 25 to 30 percent of the country’s GDP, was among the highest in ASEAN.

An ASEAN logistics study in 2008 revealed that the logistics cost of intra-ASEAN container movements reached $2.25 billion a year, with around 55 percent representing out-of-pocket costs (transport, terminal and access costs) and 45 percent time costs.

 

Transportation Minister Budi Karya Sumadi said that Indonesia has surpassed the world aviation safety standards, based on the International Civil Aviation Organization (ICAO USOAP), from 50 to 80.
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