SOEs Team Up to Improve Maritime Connectivity

March 10, 2016, Jakarta Post

State-owned enterprises (SOEs) related to the logistics and maritime sectors have teamed up to faster improve the country’s connectivity, in line with President Joko “Jokowi” Widodo’s maritime axis vision.

State port operator PT Pelindo II signed on Tuesday a blanket agreement with fellow state port operator PT Pelindo I to develop ports in the western part of Indonesia, and an agreement with PT Pelindo IV to develop ports in the eastern part of Indonesia.

Meanwhile, Pelindo II has also signed a memorandum of understanding (MoU) with another six state enterprises. These include deals with state construction firm PT Waskita Karya, for the Cimanggis-Cibitung toll road development, and state mining firms PT Antam and PT Inalum for the utilization of the soon-to-be-developed Kijing Port in West Kalimantan.

Those partnerships are based on the recently issued Presidential Regulation No. 3/2016 focused on the acceleration of 10 infrastructure projects.

“This is a step toward implementing our maritime roadmap, which includes ports, shipping, logistics and industry to support it all,” State-owned Enterprises Ministry deputy head of transportation construction, infrastructure and facilities Pontas Tambunan said.

Pontas said he expected enterprises to integrate the sector, as the country needed to not just build ports for its maritime highway, but also build the supporting industry, as in the case of PT Antam and PT Inalum, where the Kijing port will support a smelter-grade alumina refinery in Mempawah,
West Kalimantan.

The Kijing port, slated to be built on 200 hectares, is expected to add to the capacity of Pontianak Port, which has reached its container capacity of 217,000 total equivalent units (TEUs). The new port is expected to support 5,000 hectares of soon-to-be-established nearby industrial land, as well as the estimated 4 million ha of palm oil plantation in the area.

The ministry aims for the partnerships to be able to demonstrate progress within three months of this signing.

President Jokowi has set out to reduce the country’s high logistics costs through his maritime highway initiative. Logistics have been plagued by uncertainties surrounding shipping schedules as well as a lack of infrastructure in the eastern part of the country.

The goal of the program is to reduce logistics costs from 23.5 percent of GDP to 19.2 percent by 2019.

Meanwhile, Pelindo II acting president director Dede R. Martin said that he also expected the joint venture with the fellow state operators to improve connectivity between state ports, standardizing facilities and services across the country.

Currently, Pelindo II runs a total of 12 ports, Pelindo I runs 25 ports and Pelindo IV runs 24.

Dede added the cooperation with Waskita Karya would smooth shipping logistics out of the country’s biggest port Tanjung Priok in Jakarta through the development of the Cimanggis-Cibitung and Cibitung-Cilincing tollroads. The joint venture will see the companies combine their shares in the toll road for a total investment of Rp 10 trillion (US$750 million).

“When our first phase of the Tanjung Priok development is done, we will have an additional container capacity of 4.5 million TEUs and then 15 million TEUs when Kalibaru Port is done. We will need the toll road for the smooth operation of shipping,” he said.

Meanwhile, state shipping firm PT Pelayaran Nasional Indonesia (Pelni) also signed MoUs with eight enterprises, including with state logistics firm PT Bulog for commodity shipping and state warehousing firm PT Bhanda Ghara Reksa for logistics purposes.

Pelni itself has so far been assigned to run ships on six routes connecting remote areas such as Tual in Maluku and Timika in West Papua.

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