New Maritime Glory Era of Indonesia

May 6, 2015, Investor Daily, Page 21, Section: Money and Banking News

Teluk Lamong Terminal and APBS Become the First

As the world’s largest archipelagic country, Indonesia has tens of thousands of islands scattered across the country, which stretches from Sabang in the western tip to Merauke in the eastern end. The country’s area, which consists of islands, is separated by the seas that account for more than half of the total territory of Indonesia. It is no surprise that Indonesia is also known as a maritime nation, given the vast area of its waters.

The geographical position of Indonesia is also very advantageous because it lies in the middle of the world’s trade routes. Situated between the Indian Ocean and the Pacific Ocean, as well as the Asian Continent and Australia, Indonesian routes are never quiet, especially with ships carrying commodities from one country to another. Since a long time ago, Indonesia has been a destination for merchants to trade or just for transit. The archipelago’s maritime glory prevailed during the reign of Majapahit Empire, which could bring some other kingdoms in the Malay Peninsula and all the way to the Philippines under its control in the 1300s.

Hundreds of years have passed and now the glory of Majapahit’s era is merely history for the Indonesian people. Yearning for the status of a maritime state has been echoed by the government elected from the 2014 general elections. In fact, in one of the government’s work programmes, which are known as Nawa Cita [Nine Priority Programmes], President Joko Widodo says [his government] will strengthen the national identity as a maritime nation. Planning for infrastructure development, supporting regulations, as well as implementation on the field have begun to be carried out.

One of the infrastructures to be developed to realise the ideals to restore the maritime glory of the archipelago is port infrastructure and its supporting facilities. As an archipelago with thousands of ports, port infrastructure in Indonesia has lagged far behind other countries in ASEAN.

Based on the 2013/2014 Global Competitiveness Report published by the World Economic Forum (WEF), Indonesia’s infrastructure and connectivity ranking was at the 61st position out of 148 countries. Meanwhile, other countries [fared better], with Singapore being ranked the 2nd in the world, Malaysia the 29th, Thailand the 47th, Brunei Darussalam the 58th, and Indonesia in the 61st position of the world. One year later, WEF’s 2014/2015 data show that Indonesia’s ranking in terms of its infrastructure and connectivity has increased from the 61st position to the 56th of the world.

According to the report, the availability of port infrastructure in Indonesia is still considered insufficient. This has become one of the causes of the high cost of national logistics when compared with other countries. The flow of export and import goods, as well as inter-island trade, has become obstructed and logistics costs have become more bloated. Seeing this, the government in 2015 will revitalise 24 main ports in order to sharpen the vision of maritime axis for the achievement of maritime development in Indonesia.

Starting from the East
PT Pelabuhan Indonesia III (Persero), or Pelindo III, has long put in efforts to develop port infrastructure in Indonesia. As a state-owned enterprise (BUMN), Pelindo III is the manager of 43 public ports in seven provinces in Indonesia, one of which is the Port of Tanjung Perak, Surabaya.

Tanjung Perak Port is now the second largest port in Indonesia, after the Port of Tanjung Priok, Jakarta. The flow of ships and goods through the Port of Tanjung Perak from year to year has increased. Take the example of the flow of containers; in 2014 it was recorded at a total amount of 3.1 million TEUs, rising four percent from the previous year’s 2.9 million TEUs. In fact, the container handling capacity of the port is only about 2.1 million TEUs. A similar situation has also prevailed with dry bulk goods, which in 2013 was recorded at 7.3 million tonnes and this increased to 8.6 million tonnes in 2014.

Anticipating growth in the flows of ships and goods through the Port of Tanjung Perak, Pelindo III is building Teluk Lamong [Lamong Bay] Terminal. The first stage of the construction of Lamong Bay Terminal took place in 2010 and it was completed in 2014. The first phase of Lamong Bay Terminal has an area of ​​approximately 39ha, with a capacity of 1.5 million TEUs of containers and five million tonnes of dry bulk goods.

Lamong Bay terminal will also be a semi-automatic and the first environmentally friendly terminal in Indonesia. The equipments used are driven by electric power and are automated. There are also equipments that are powered by gas and solar energy, with Euro 4 standard. All of these are done to reduce gas emissions around the harbour. The investment value of the construction project touched the figure of Rp 3.4 trillion.

In addition to physically building the port infrastructure, Pelindo III is also revitalising the Western Shipping Channel of Surabaya (APBS). APBS is an entrance to the Port of Tanjung Perak along 25 nautical miles. Before being revitalised, this shipping channel had a depth of minus 9.5m Low

Water Spring (LWS) with a width of 100m. Hence, these limited the size and cargo volume of ships coming in and out of the Port of Tanjung Perak.

In 2014, Pelindo III commenced the APBS revitalisation project, with a budget of approximately US$ 76 million. The APBS has been deepened from minus 9.5m LWS to minus 13m LWS. The shipping channel has also been widened from 100m to 150m. In this month of May, the project has been declared completed and [the channel] can be passed by larger ships with bigger cargo amounts.

The efforts made by Pelindo III aim to strengthen the port infrastructure in Indonesia. Strengthening the port infrastructure will allow the national logistics costs, which are currently quite high, to be suppressed. With the support of adequate infrastructure, commercial ships that enter and exit [the ports] are no longer restricted to be small. Ships of larger sizes and bigger cargo amounts can get in and berth in Indonesian harbours. That means, the merchandise shipped from Indonesia to other countries do not have to transit in Singapore, but the goods can directly go to the countries of destination or to the nearest ports of the destination countries.

A new era of Indonesian maritime glory will soon begin. The maritime glory that was once carved by Majapahit will start from East Java, from the Port of Tanjung Perak of Surabaya.

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