Massive capacity augmentation on the anvil-
Maritime transport is crucial to the economic growth of the Association of Southeast Asian Nations (ASEAN). For a region that includes 24,000 islands, spread across 5,200 km east to west and 3,400 km from north to south, a modern and well-managed maritime sector is crucial to Southeast Asia’s economic progress. The member countries of ASEAN have been undertaking various projects to improve the level of productivity and capacity of their ports.
Being an archipelagic country, Indonesia is dependent on sea transport for much of its domestic transportation as well as for its international trading links. Moreover, the rugged terrain that characterises virtually all of the country has made the development of sea transport infrastructure vital. The country’s cargo throughput has been increasing in line with the country’s efforts to develop port infrastructure. In particular, Tanjung Priok port recorded a throughput of 5.52 million twenty-foot equivalent units (TEUs) in 2016 compared to 5.2 million TEUs during 2015, registering a year-on-year (YoY) growth of 6.04 per cent.
With the view to further increase the cargo handled at its ports, Indonesia has embarked upon several port capacity expansion projects, which are discussed below.
Projects on the anvil
New Priok expansion project (Kalibaru port)
One of the biggest projects under development at present in the country is the construction of a new port, Tanjung Priok, an extension of Indonesia’s busiest port. The new port is expected to bring Indonesia’s port facilities on par with other world-class ports. Besides, the Tanjung Priok harbour in North Jakarta, which handles more than half the total goods that are exported from or imported to Indonesia, has become overloaded over the years.
The project is being implemented by the state-owned Pelindo II. The entire project has been divided into three phases. Construction work on Phase I of the project (New Priok Container Terminal One [NPCT1]) commenced in 2012 and was inaugurated in September 2016. NPCT1 entailed an investment of Rp 12 trillion and added 1.5 million TEUs per annum to the port’s capacity.
The entire project is expected to add a capacity of 19.5 million TEUs and is scheduled to be completed by 2024.
Bitung port development
The project is being implemented by the state-owned enterprise Pelindo IV. It is being developed in three phases. Phase I comprises container yard expansion and berth extension by 500 metres. The second phase (from 2018 to 2022) comprises berth extension by 250 metres, in which the berth will form a 90 degree corner connecting land. Under the last development phase, Pelindo IV has targeted container yard addition and bulk terminal construction on the side of the container yard. The project is at present under construction and is scheduled to be completed by 2032.
Kuala Tanjung international hub seaport
The Kuala Tanjung seaport is being developed to create an entrance for logistics flow to the western region of the country. Based on an assessment by the Ministry of Transportation (2015), the project will result in an increase in the volume of container traffic to 12.4 million TEUs by 2039. Because of the increased container traffic, Indonesia is expected to expand its seaborne trade by availing of seaport demand previously catered to by Singapore and Malaysia.
Kuala Tanjung port is being developed in several phases – Phase I involves the construction of a multi-purpose terminal; Phase II involves the development of an industrial area; and Phase III involves the development of a container port and residential area.
Construction work on the project is under progress and about 80 per cent of the work has been completed. Entailing an investment of about $188.23 million, Phase I is expected to commence partial commercial operations by August 2018.
Seaport in the northern part of Java island with container terminal (Patimban port project)
Being implemented by Pelindo II, the project is being developed in phases with Phase I involving the construction of car and container terminals.
On November 13, 2017, the Japanese government signed a 118.9 billion yen ($1 billion) loan to Indonesia for the construction of a new seaport in West Java. The loan has a grace period of 12 years and an interest rate of 0.1 per cent per year. It is expected to fund 83 per cent of the cost of Phase I construction of the project.
Inland waterways/Cikarang-Bekasi-Java Sea
The project is being developed to utilise the river canal route as an alternative transportation route. The project is expected to reduce road traffic congestion from the Cikarang and Karawang industrial areas to Tanjung Priok seaport.
It is being developed in two phases. In Phase I, the canal transportation system will utilise the existing canal and in Phase II, Pelindo II plans to add a canal route from Tanjung Priok to Cikampek where the canal will connect the logistics stream from Tanjung Priok to the Cibitung-Cikarang industrial area in Bekasi as well as in Cikampek, Karawang. The project implementation is scheduled to be completed by 2019.
Pelabuhan KEK Maloy seaport
The seaport project is being implemented by the Ministry of Transportation at an investment of Rp 27 billion. Construction work on the project commenced in 2013 and is scheduled to be completed by 2018.
Construction of Sorong seaport
Located in West Papua province, in the district/city of Sorong, the seaport project is being implemented by Pelindo II. The project is scheduled to commence commercial operations by January 2021. It is expected to entail an investment of Rp 2,400 billion.
Makassar new port project
The seaport project is located in South Sulawesi province, in the district/city of Makasar. The project is being implemented in three stages with Stage I further divided into Packages A, B and C. Package A involves the production of secant pile walls and reclamation/replacement of soft soil; Package B includes a reclamation area of approximately 13 hectares, a causeway of approximately 1,276 metres, a 16 hectare container yard, and port pool dredging for a minimum draught of 16 metres; Package C involves the construction of breakwater along 1,310 metres.
Construction work on the three packages of Stage I is in progress and the three packages have achieved physical progress of 36.46 per cent, 25.72 per cent and 27.46 per cent respectively.
Expansion of Palu seaport (Pantoloan, Palu Bay)
The seaport project is being implemented by Pelindo IV and is expected to entail an investment of Rp 209 billion. It is under construction and is expected to be completed by 2019.
Development of Kijing seaport
Being implemented by Pelindo II, construction work on the project was inaugurated in April 2018. The project will be implemented in four phases. In the first phase, Pelindo II will construct four terminals (container, dry bulk, multi-purpose and liquid bulk terminals). The capacity of the container terminal is projected to be 1 million TEUs per annum; the liquid bulk and dry bulk terminals will have a capacity of 8.3 million tonnes per annum (mtpa) and 15 mtpa respectively. The seaport is expected to be integrated into the special economic zone to be developed in the area.
Phase I of the seaport project is expected to commence operations by the third quarter of 2019. Upon completion, the seaport project will strengthen inter-island connectivity.
Development of Kupang seaport
The seaport project is expected to add a capacity of 0.5 million TEUs at an investment of Rp 223 billion. The project is presently under construction and is expected to be completed soon.
The way forward
According to Southeast Asia Infrastructure Research, the country offers a lucrative pipeline of 11 upcoming and ongoing projects. This includes construction of new berths and terminals, upgradation and mechanisation of existing berths and terminals, and creation of new port-related facilities, and ancillary infrastructure. These projects are estimated to entail an investment of more than Rp 48.83 trillion. This translates into a significant opportunity for project developers and engineering, procurement and construction contractors.
