Port rivalry: Suspension of New Priok construction increasingly likely

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.

Bisnis Indonesia: Properti komersial Pelabuhan Patimban pacu relokasi industri

18 November 2020

By Rinaldi M. Azka

 

Bisnis, Jakarta – Various parties are suggesting suspending the construction of Kalibaru Port or New Priok in Tanjung Priok Port in Jakarta as there is already Patimban Port in Subang, West Java.

On the contrary, the Indonesian Industrial Estate Association predicts Patimban Port will lack visitors as access to the port is still lacking.

Indonesia Transportation Society (MTI) Sea Transportation Forum Head, Leny Mayouri reckoned that the first stage of the development of Kalibaru Port, which leaves New Priok Container Terminal (NPCT) 2 and NPCT 3, must forecast the needs of the industries served. If Kalibaru Port is no longer required, he suggested that the development of Tanjung Priok Port should be suspended.

“The development of NPCT and Kalibaru Port can continue if demand is forecasted. If most industries in Marunda and Cikarang do not need them or many industries are moving to Patimban and West Java, the development of Tanjung Priok can be suspended,” he said to Bisnis on Tuesday (17/11).

He stated that PT Pelabuhan Indonesia II/IPC that was constructing New Priok could focus on the existing market with a total container flow of nearly 7 million TEUs per year.

Besides that, IPC can provide the best service by improving service quality and efficiency.

He is also suggesting the SOE to expand to services that derive from port business. With that step, Tanjung Priok Port can continue to operate and be competitive.

Leny said that port services could be optimal if hinterlands of industrial estates were located in a radius of 300 km to 500 km. “Except if the port is also a transhipment port, so services of loading and unloading transhipment ships must also be effective,” he said.

Leny aggress that Patimban port and Tanjung Priok Port are synergising and completing each other. He suggested both ports to share the market to improve the competitiveness of logistics in Indonesia internationally.

“Tanjung Priok Port is also serving markets in Jakarta and around Jakarta until Cikarang. Patimban Port is serving markets around Patimban and West Java. Patimban Port will also lower traffic of long-distance land transportations,” he said.

Indonesian Logistics Association (ALI) Chairman, Zaldy Ilham Masita also agrees to suspend the New Priok project. With Patimban port, he affirmed that the geographic location of New Priok was not worth maintaining.

“For 10 years, Tanjung Prok has not been fit to support the growth of ports as it is located in Jakarta, while most port users are no longer in Jakarta,” he said.

If the government forces Tanjung Priok Port to be the main port of domestic and international services by increasing its capacity, he predicts that that will increase the price of delivery and cause Jakarta to be more congested.

He reckoned that the New Priok project proposed by the IPC President Director at the time, RJ Lino, was supported by a direct route from Kalimalang, which was a new toll road.

“RJ Lino opposes the construction of Cilamaya to replace Tanjung Priok. Finally, Cilamaya is cancelled by Jusuf Kala and Patimban Port is constructed to replace it,” he revealed.

In line with the development in the last 10 years, he affirmed that Tanjung Priok Port was not suitable to be a main port that supported industrial estates around Jakarta.

He reckoned that the construction of Patimban Port was crucial and was a main agenda of Japanese investors so that various industries, especially the automotive industry, in Indonesia could remain competitive.

“The mistake of the government was making a large investment in IPC to construct NPCT that will not be competitive with Patimban,” he said.

He suggested that Patimban Port should not complement Tanjung Priok Port, but it must be prepared to replace Tanjung Priok with a transition period of 5 to 10 years.

PT Pembangunan Perumahan Tbk (Persero) Corporate Secretary, Yuyus Juarsa stated that the firstt stage of Kalibaru port project was suspended due to contract issues. Moreover, in line with the new contract, NCPT 2 and NCPT 3 can be constructed in 2022.

“It is true that the construction was suspended due to contract administration [issues]. There is an agreement for the dispute, so the project continued as of August 2020,” he explained to Bisnis.

PP prepared NPCT 2 and NPCT 3, but PP does not construct the terminals.

“Our contract ends by the end of 2022, which is for PT PP to construct the first stage of NPCT 1. For the construction of NPCT 2 and 3, PP only handles the stake, the dredging, and the breakwater,” he said.

IPC President Director, Arif Suhartono previously guaranteed that he would continue the Kalibaru Port project.

He claimed that the company was finishing several constructions from the previous contractor, namely the construction of the breakwater and seaway 57.

He targeting to tender NPCT 2 by the first quarter of 2021.

Arif affirmed that global bonds that were used to construct this port would still be utilised excellently.

 

Patimban’s potential

During a webinar on Patimban Port held by the Transportation Ministry, Indonesian Industrial Estate Association (HKI) Chairman Sanny Iskandar said that Patimban Port might be lacking visitors as the access to the port was still limited.

He said that Patimban Port’s condition that had operated first before the development of the special area around Cikopo-Palimanan (Cipali) toll road corridor would be a challenge for the operation of the port.

“From what I have seen, Patimban is a port that has been constructed, but the development of the industrial estates, especially around Cipali toll road corridor, namely in Subang, Majalengka, Sumedang, and Cirebon, has only commenced,” Sanny said.

He mentioned that there were companies and factories in the industrial zone around the area, but the number of the companies and factories did not meet the capacity of Patimban Port.

For example, he said that Surya Cipta Industrial Estate would commence groundbreaking this week. He predicts that the industrial estate will finish construction in the next 1.5 to 2 years.

Moreover, several other factories and industrial estates will only be built next year.

He suggested to divide the industrial estates around the Jakarta-Cikampek toll road corridor between Tanjung Priok Port and Patimban Port.

“These [industrial estates] must be encouraged to use Patimban, so that industrial estates in the west side of Jakarta, namely in Banten, Jakarta, and some part of Bekasi will use Tanjung Priok Port. Some parts of Bekasi, Karawang, and Purwakarta can go to Patimban,” he explained.

On the other hand, he mentioned that, to access Patimban Port, visitors could temporarily go through the north beach road.

This is because the connected access from Cipali interchange to the port will only finish in the next three years.

“A special forum to manage the industrial estates in Bekasi, Karawang, Purwakarta is required. The companies in the industrial estates, namely Yamaha, Honda, Suzuki, Toyota, Wuling, and Hyundai will be collected in the forum, as well as the automotive component industry and other industries, such as consumer goods, chemicals, and food and drink, so that they can be facilitated by Patimban,” he said.
 

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