Patimban Port to reach financial close soon
The government is slated to finalize a loan agreement with the Japan International Cooperation Agency (JICA) next month to support the construction of Patimban Port in West Java after the latter completes documents required for the deal.
Transportation Minister Budi Karya Sumadi said the government and JICA had agreed on principal aspects of the loan agreement, but needed to iron out details.
“The financial close will be in October and the groundbreaking will start either in December or January,” Budi said after a meeting at the office of the coordinating maritime affairs minister in Jakarta, recently.
He said the construction of vehicle terminals would be carried out in March 2018 after the port groundbreaking, while the Public Works and Public Housing Ministry would soon open tender for the terminals and access road development.
“The land for the access road is ready and a tender to build the road and terminal will be held. Hopefully they can be finished on time,” Budi said.
Aside from preparing the tender, the ministry anticipates smooth land clearing by working with the State Asset Management Agency (LMAN), which has been allocated Rp 500 billion (US$37.76 million) to carry out the task.
However, the LMAN is awaiting the House of Representative’s approval of the land clearing budget.
According to West Java provincial government data, the land clearing for the port will affect 120 families in seven villages, where the residents also use some of the sea area for aquaculture.
The West Java administration had marked land for the port and prohibited locals from selling the land, said Bay Mokhamad Hasani, the Transportation Ministry’s acting sea transportation director general.
The first construction phase for the port requires 672-ha .
“The construction will begin from the sea area, so it can be done along with the land clearing process,” he said.
The port needs Rp 43.5 trillion, with 71 percent of the financing to be covered by a loan from JICA.
The port is designed to have a container capacity of 1.5 million 20-foot equivalent units (TEUs) after it is partially completed in 2019 and 7.5 million TEUs by 2027, about half the capacity of the country’s busiest port, Tanjung Priok in North Jakarta.
The port will be located in Subang, around 70 kilometers from the Karawang Industrial Estate in Bekasi, West Java where many Japanese automotive factories are located.
The port construction is part of President Joko “Jokowi” Widodo’s call for pushing infrastructure development to spur the country’s economy, which is expected to grow 5.2 percent and 5.4 percent in 2017 and 2018, respectively.
Coordinating Maritime Affairs Minister Luhut Pandjaitan said the port would be managed by a joint venture, or consortium, between state-owned port operator Pelindo II, an Indonesian private company and a Japanese firm. The government will hold a tender to select the local private company.
He added that Indonesia, which is analyzing the legal aspects of the joint venture, would have 51 percent shares in the firm and the rest would be owned by Japan. The 51 percent ownership would be divided between Pelindo II and the local private company.
Minister Budi Karya Sumadi said it would need an initial investment of Rp 3 trillion to operate the port, particularly to purchase equipment.
He added that the government would provide initial investment for operations, thus it would charge concession fees to the operator.