|Indonesia to kick off $2.47b port project in July|
|Friday, 27 April 2012 11:11|
Armed with a new presidential decree on the construction of the much-awaited Kalibaru Port, the Indonesian Port Corporation (IPC), also known as Pelindo II, has decided to raise its investment commitment for the construction of the country's biggest industrial port, reported Jakarta Post.
IPC president director Richard Joost Lino said yesterday the Kalibaru Port would have a total capacity of 13 million TEUs and would be constructed in three phases, with the first phase would absorbing US$2.47 billion in investment.
"In the first phase, we are going to develop three container terminals and two fuel berths with a total investment that is projected to reach $2.47 billion. The first phase will be completed in 2014," he said.
Richard said the first phase of the project would see the construction of three terminals with a total capacity of 4.5 million TEUs. According to Richard, the ground-breaking of the first phase would be carried out in July. The construction of the entire Kalibaru Port, including its nine terminals, would be rebranded as "New Priok" as it nears its expected completion in 2023, he added.
The Kalibaru Port project initially began as part of a plan to expand the country's busiest port, the Tanjung Priok Port, through the construction of new terminals that would have a capacity of 1.9 million TEUs.
However, as part of the Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI), the government has decided to expand the terminals into a port and appointed the IPC as the sole project developer under a presidential decree that was issued earlier this month.
The Indonesian government, in cooperation with the private sector, plans to spend $150 billion on strategic infrastructure projects within five years.
"This is the largest port in the country and it will help boost the capacity and efficiency of national logistics chains, with productivity levels comparable to major ports worldwide," he said. Moreover, he said that the IPC included toll roads connecting Marunda and the port and railway projects that would connect the port and the Cikarang Dry Port in the master plan.
"We are open to any party that is interested in constructing the toll road and the railway," he said.
Richard refused to comment on the total investment needed for the whole project, but he said that the IPC, together with its 10 subsidiaries, was able to provide the funds to finance the first phase of construction.
Besides using their internal resources, the project will be funded through partnerships from major shipping companies and loans from national and international lenders.
One national lender that committed to finance the project was the country's largest lender, Bank Mandiri, with $1.28 billion, Richard said. On top of bank loans, he added, the company plans to raise Rp $217 million from a bond issuance in the near future.
The development of New Priok is crucial for Indonesia to sustain growth, adding another shipping gateway to help relieve pressures on Tanjung Priok Port, the nation's busiest port.
According to recent IPC data, Tanjung Priok surpassed its handling capacity of five million TEUs in 2011 as container traffic reached 5.8 million TEUs that year, a 23 percent jump from 4.7 million TEUs in 2010.
Source: Cargonews Asia
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