Chinese investor interested in Tanjung Carat Port project
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Investor Tiongkok minati proyek Pelabuhan Tanjung Carat
22 January 2022
By: Amrozi Amenan
Jakarta – Chinese Investor Shanxi International Economic & Technical Cooperative Co Ltd is interested in investing in the construction of Tanjung Carat Port in Banyuasin Regency in South Sumatra.
Shanxi International Economic & Technical Cooperative Co Ltd Indonesia General Manager, Jason Hang, said that Tanjung Carat Port was located at a strategic location, so it can be included in the company’s business expansion plan.
The company’s interest in investing in Tanjung Carat Port is encouraged by the abundance of natural resources in South Sumatra, such as rubber sap, palm oil, coal, crude oil, and gas.
“We hope to participate in the investment in Tanjung Carat Port. We see South Sumatra’s potential to be excellent. Hopefully, soon, cooperation can be established by signing an MoU (Memorandum of Understanding),” Jason Hang said during the meeting with South Sumatra Governor Herman Deru at Griya Agung Palembang as quoted by Antara on Friday (21/1).
South Sumatra Governor Herman Deru said that the investor was great news for citizens in South Sumatra as they had been longing for a deep seaport. Until now, the deep seaport has been approved to be a national strategic project (PSN).
“The seaport that will be the export gate of South Sumatra is in the finalisation process of land procurement,” Herman said.
According to him, the government is ready to resolve various principal issues to construct the international seaport, such as land availability, road access, sea depth, as well as location for the pier.
“In the future, the government will focus on the availability of funds,” he stated.
Herman Deru also said that activities in Tanjung Api-Api Special Economic Zone (SEZ) would be transferred to Tanjung Carat SEZ, which is located next to Tanjung Carat Seaport.
“[The activities] cannot be directly transferred to Tanjung Carat SEZ, but the SEZ status of Tanjung Api-Api must be revoked first. It is currently on process,” Herman said in response to the decision of President Joko Widodo to revoke the SEZ status of Tanjung Api-Api.
The decision is stated in Government Regulation No. 2 of 2022 on Revocation of Government Regulation Number 51 Year 2014 Regarding Special Economic Zone of Tanjung Api-Api.
Previously, Transportation Minister Budi Karya Sumadi, during his visit to Palembang, said that the government would involve funding from private companies to construct Tanjung Carat port in Banyuasin Regency.
“They can be domestic consortiums and foreign investors. This will be studied,” he stated.
Tanjung Carat Port project is set to conduct groundbreaking by the end of 2021, but that target cannot be achieved as issues regarding the land have not be resolved. This port is planned to be constructed on a land of 1,330 hectares (ha). Tanjung Carat Port is expected to be an export gate as South Sumatra does not have a deep seaport yet. Besides that, the port also lightens the load of Boom Baru Port in Palembang that is reckoned to be incapable of fulfilling the region’s needs.
Until now, commodities, such as palm oil, rubber, coconut, and other commodities, from South Sumatra have been carried through the port. The transportation process is not optimal as it has to cross Musi River. Shipping tends to be hampered due to sedimentation.
Strategic location
Maritime observer from Institut Sepuluh Nopember (ITS) in Surabaya, Saut Gurning, said that the interest of the Chinese investor was logical due to the one belt-one road commitment, despite the Covid-19 risks. This is also part of China’s ambition to look for strategic locations in Indonesia to create business centres and support the logistics route for products, cargo flow, and trade. China’s trade is not only to and from the Indonesian market, but it also covers the market potential of ASEAN countries that have always been partners of China in intra-Asian trade.
“Tanjung Carat Port seems like an interesting option,” Saut said to Investor Daily on Friday (21/1).
The port provides alternatives that are not only industrial estates that are required to increase the value of commodities, but also logistics accessibility by sea that is more efficient with a larger potential of ship traffic compared to Boom Baru Terminal and Sungai Lais Terminal that are limited as the maximum depth of shipping by river is only 7 metres. With the existing depth of 7 metres, the capacity of the shipping fleet is relatively limited with ships that can only carry less than 10,000 DWT or fewer than 1,200 containers on the container sheep fleet.
Meanwhile, Carat Port protrudes more to the sea with a depth of around 12 to 13 metres to accommodate larger ships, so the economic potential and the logistics efficiency are better.
Besides that, with the new location, Carat Port that is located on the coast of Sungsang Banyuasin area is open to more trade interactions that are closer and more direct to areas in Pangkal Balam, Tanjung Pandan, Kuala Tanjung, Batam, Tanjung Priok, and other important areas in Sumatra and western Kalimantan.
According to Saut, several facilities at the port are relatively new and are specialised for current and future demands in the next 20 to 30 years. In other words, the infrastructure capacity provided is larger than the existing cargo volume served. This is a challenge in itself.
“The challenge is how to increase the cargo potential in the hinterland and the foreland around the port so that the economic impact and the maritime logistics are more significant. For example, in Kuala Tanjung, Batam, and Kijing, and other locations, the challenge is increasing utilisation of the ports’ capacity that are still very much available through acceleration and realisation of the utilisation of industrial estates, warehouses, and economic areas that support cargo recovery and provide added value,” Saut said.
He added that, besides Carat Port, there were still more potential of new port development in many locations, depending on regional, national, and international growth.
“The potential is still quite large in terms of volume, commodity type, and integrated port service type,” Saut added.
