Indonesia’s state port firm will start building a new container terminal in Jakarta this year to cope with overflowing volumes at the main shipment hub in Indonesia’s capital as trade grows.
The first phase of the 22 trillion rupiah ($2.45 billion) project is expected to be completed in two years, with funds coming from domestic and foreign firms as investor interest grows in developing infrastructure in Southeast Asia’s biggest economy.
The terminal project is part of a government plan to expand Jakarta’s main Tanjung Priok port as it seeks to overhaul infrastructure and attract further long-term foreign direct investment—a move which would put government finances on a more stable footing.
“Tanjung Priok’s volume at this moment is nearly congested, very high, so if we are not ready within two years, it will be a big problem,” said Richard Lino, president director of state port operator PT Pelabuhan Indonesia (Pelindo) II.
The first phase will have a capacity of 1.5 million 20-foot containers (TEU), with Lino aiming to finish the full port in the next five to six years. Reclamation work will be done in Kali Baru Utara, North Jakarta, for the 270-hectare terminal.
Indonesia’s economic coordinating minister said that the government will ease access to the new terminal by providing access from three toll roads and a railway.
“We also will prepare a new port which is expected to be completed in the next 15 years in the eastern part of Jakarta,” Lino added.
Many investors have been put off investing in Indonesian projects because of graft and red tape, as well as a lack of efficient and well-maintained ports, roads and railways. Some infrastructure projects are delayed or scrapped, often because of difficulties getting investment and permits for land use.
But thanks to increased political stability and resilient growth, Indonesia’s government has seen much more investor interest in long-term projects recently, and expects foreign direct investment to jump 22 percent in 2010 from a year ago.
Several foreign investors have announced new projects in the resource-rich archipelago in recent weeks. South Korea’s Hankook Tire and steel giant ArcelorMittal are considering investments in Indonesia, of $1 billion and $5 billion respectively, while Chinese wealth fund CIC is interested in investing up to $25 billion, government officials said. (Reuters)