Rp 1t Port Planned for Remote West Papua

Jakarta Globe, Faisal Maliki Baskoro, July 26, 2011

The proposed $118 million West Pacific Port in West Papua
would have  a capacity 30 times greater than the existing
Sorong Port. (JG Photo/Yudhi Sukma Wijaya)

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State port operator Pelindo II plans to start building a new port in Sorong, West Papua, as soon as next year, as part of government efforts to reduce logistical and shipping costs to the remote eastern region.

Richard Joost Lino, president director of Pelindo II, said on Tuesday that the company had formed a consortium with major shippers including Samudera Indonesia, Meratus Line, Salam Pacific Indonesia Lines, and Temas Line to build the port, which will cost Rp 1 trillion ($118 million).

“Pelindo will act as the leader in the consortium, and we will contribute 30 percent [of the cost],” he said. “We will put the project up for tender [for contractors] later this year while construction will start early next year.”

West Pacific Port, which will replace the existing Sorong Port, will be able to handle 750,000 twenty-foot equivalent units (TEUs) once it is completed in 2013, Richard said.

Sorong Port can handle 25,000 TEUs, while cargo traffic to the region averages 700,000 TEUs a year, he said.

West Pacific Port, Richard added, would also serve as a regional port for traffic to and from Papua New Guinea and the Bismark Islands, East Timor, Darwin in Australia, New Zealand and New Caledonia. The new port is also expected to halve distribution costs to Papua, he said.

Pelindo II operates 12 seaports across the archipelago, including the busiest, Tanjung Priok, in North Jakarta.

Analysts have said that Indonesia must boost the development of infrastructure such as roads, airports and seaports to create more jobs and achieve its target of 7 percent economic growth by 2014.

Juniman, an economist at Bank Internasional Indonesia in Jakarta, said the government’s plan to build the port in Papua was the right move to reduce bottlenecks in shipping.

“The project will help create jobs and boost economic growth,’’ he added.

Pelindo II is also bidding on the rights to operate a new port in Jakarta.

It signed a Rp 11 trillion loan with Bank Mandiri, the country’s largest lender, on Tuesday. That standby loan would be used to finance the first phase of its North Kalibaru Port project in North Jakarta, if Pelindo were to win the rights to build the port.

The Transportation Ministry has not yet closed the tender for the project, which will cost an estimated Rp 20 trillion.

“The new port is vital because the busiest port in Indonesia will exceed maximum capacity this year, and this will cause higher logistic costs and longer loading and unloading times,” Richard said.

North Kalibaru Port would add between 4 million and 6.5 million TEUs of cargo capacity to Tanjung Priok Port — which has a maximum capacity of 5 million TEUs.

Richard said the North Kalibaru facility, which would span 3.5 square kilometers and include an oil and gas terminal, could be completed in 2017.

Pelindo posted a 30 percent increase in profit last year to Rp 1.2 trillion and, according to Richard, is on track to meet its target of Rp 1.6 trillion in profit this year.