A construction company is planning to sell its stake in an Indonesian port to fund new infrastructure projects.
State-owned PT PP is planning to get rid of stakes in four infrastructure projects, including North Sumatra’s Kuala Tanjung greenfield Port, to help finance its capital expenditure in 2020, reported The Jakarta Post.
“We’re planning to divest our stakes in Kuala Tanjung Port and the Medan-Kualanamu-Tebing Tinggi toll road [in North Sumatra], the Pandaan-Malang toll road [in East Java], the Manado-Bitung toll road [in North Sulawesi] and the Balikpapan-Samarina toll road [in East Kalimantan],” finance director Agus Purbianto stated.
The first development phase of Kuala Tanjung Multipurpose Terminal was inaugurated in 2018, but the port's development has been troubled by delays and difficult concession negotiations. There also appears to be revenue problems.
In April, Port Strategy highlighted that Pelindo I claimed to have invested $350m to have the capacity to handle the big ships, but David Wignall of Seaport noted that based on its own forecasts “the revenue will be about $25m in 2025 – barely enough to cover the annual interest”.
In 2017, DP World agreed to advise on the development of the Kuala Tanjung Port and logistics zone and the Port of Belawan to help Indonesia grow its domestic and international trade.
Port Strategy has contacted PT PP for comment.
