All things Indonesian

Every six months or so the Indonesian government makes a big song and dance about the investment possibilities across the archipelago’s ports, yet rarely are there keen international takers. Those that have invested, most notably Hutchison Port Holdings at Tanjung Priok, have not enjoyed a smooth ride,with questionable regulations,different work ethics and minimal box traffic.

So it was with huge surprise that so much interest is suddenly being shown in the country’s ports this year, indicative perhaps of the global terminals rush. For instance, in early May, South Korea’s Saman Corp, a machinery manufacturer, set aside $1bn to build a massive container depot linked by rail to Tanjung Priok.

The company said the site in the Jababeka industrial estate in Bekasi will be converted into a container terminal, and linked via rail to the port at Jakarta. A fortnight earlier there was an announcement from

Ireland’s Dublin Port Company that it was going to invest in war torn Aceh province to develop Sabang off the northern tip of Sumatra,in a deal that could cost up to $900m.

“Sabang could present an attractive option as a deep-water transhipment centre to anyone seeking to avoid the increasingly congested Malacca Straits, through which some 30% of the world’s shipping passes,” the Financial Times noted at the time.

The Irish firm and the provincial government have agreed to form Sabang Hub International Port, an equal share joint-venture company that is likely to be up and running by July, according to Saiful Achmad, head of the Sabang Free Trade Zone Management Board.

“Our plan is to build a quay 2,500m long, and the harbour will be 22m deep. The contract will last for 50 years,”he says.

International Container Terminal Services Inc of the Philippines bought out Portek’s investment at Makassar Container Terminal in South Sulawesi two years ago and is rumoured to be in the hunt for another Indonesian terminal.

Meanwhile, this January, French line CMA CGM rejected an investment proposal at Batam,an island near Singapore.The government is looking for a fresh investor at its long-awaited container terminal project in Batu Ampar,Batam after France’s CMA CGM pulled out of the running. CMA CGM, the world’s third largest container line, quit after the government rejected its request for a longer concession from 20 to 50 years. The cost of the terminal is slated to be $400m with a 70,000 teu annual capacity.CMA CGM,which was the sole bidder for Batam, has said it will invest in Malaysia instead.

DP World is firmly entrenched at Surabaya where P&O Ports first bought into back in 1999, the facility now boasting a capacity of just under 2m teu. However, the on-off courtship of local officials by both PSA and APM Terminals for a slice of action at Bojonegara, situated west of Jakarta, shows no sign of results despite talk of a major port project here going on now for more than a decade. HPH won a contract there in 2003, then it was nullified.