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Pelindo firms to merge into world’s ‘eighth-largest’ port operator

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Pelindo firms to merge into world’s ‘eighth-largest’ port operator
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A Pelindo I officer speaks into a walkie-talkie while a crane loads a container onto a ship during a trial run of the Kuala Tanjung Multipurpose Terminal in Batu Bara, North Sumatra, on Tuesday. State-owned port operator Pelindo I is completing construction of the first phase of Kuala Tanjung Port, which has a capacity of 600,000 twenty-foot equivalent units.(Antara/Irsan Mulyadi)



Eisya A. Eloksari (The Jakarta Post)
PREMIUM
Jakarta
● Thu, September 2, 2021

State-owned port operators PT Pelabuhan Indonesia (Pelindo) I, II, III and IV are to merge into one company on Oct.1, aiming to lower domestic logistic costs and expand business globally.

Deputy State-Owned Enterprises (SOE) Minister Kartika “Tiko” Wirjoatmodjo said on Wednesday that the merger would enable better port integration and business standardization, as well as optimize capital expenditures. PT Pelindo II, also known as the Indonesia Port Corporation (IPC), will take over the assets of Pelindo I, III and IV, all three of which will then be disbanded without liquidation.

“This merger will open up the opportunity for the company to go global as the merger would make Pelindo the world’s eighth-largest container terminal operator, and we can compete globally," Tiko said during a press conference.

 

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The company practically own almost all important port in Indonesia, including the busies one, Tanjung Priok Port and New Tanjung Priok port Jakarta

Tanjung Priok port, North Jakarta


New Priok First Phase, North Jakarta

 

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Indonesia private sector who will challenge PT Pelindo will likely be CT Corp. CT Corps is the operator of Indonesia future biggest port, Patimban port, that is located in West Java, Indonesia main location for industry. They will partner with Indika group which main business is coal mining.

Patimban port will be build in stages and will be completed in 2027 inshaAllah

Patimban Port construction.


CT Corp future leader is Chaerul Tanjung daughter

Putri Tanjung

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INDIKA Group CEO, Arsyad Rasyid

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Patimban Port, Subang, West Java

Grand strategy of the region

 
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Ahead of the Port SOE Merger, Pelindo IV Transforms and Accelerates National Strategic Projects

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Makassar New Port


PT Pelabuhan Indonesia IV (Persero) or Pelindo IV is transforming some of its managed ports while continuing to develop a number of ports that are included in national strategic projects. This is done in preparation for the integration process of state-owned enterprises (BUMN) ports.

Pelindo IV President Director Prasetyadi said that his party was spurring the completion of several national strategic projects in its operational area, such as the Makassar New Port, the development of the Sorong Port, and the development of the Bitung International Hub Port.

He explained that phase 1A of the Makassar New Port has been completed and is already operating, and shows increasing performance. In semester I/2021, Makassar New Port has served 203 calls or ship visits with 85,913 TEUs or has reached 75.58 percent of this year's Work Plan and Budget (RKA).

That way, overall Makassar New Port (MNP) has served 798 calls with 315,832 TEUs since operating in November 2018. “In terms of development, currently the development of MNP is still continuing to phase 1B and 1C with the addition of a 680-meter pier. Until July 31, 2021, the progress of MNP's physical investment has reached 78.45 percent," he said, Thursday (16/9/2021).

In addition to MNP, Pelindo IV is also working on the development and transformation of the Sorong Port with an investment value of IDR 165.98 billion. Until now, the progress of the physical work has reached 25 percent with the construction and pavement of the container yard (CY) work, including stockpiling activities, laying of LPB material, and installation of geotextiles. To increase the productivity of Sorong Port, the company has also added two units of container cranes (CC), and two units of rubber tyred gantry (RTG) cranes.

Currently, the company is also working on the construction of the Bitung International Hub Port which has been completed and has been put into operation. After that, the Bitung International Hub Port will be developed in stages for the stacking yard and container dock, as well as the process of completing the Bitung Port Master Plan (RIP).

The next national strategic project in the Pelindo IV area is the rehabilitation and reconstruction of the Port in Palu Bay which is a synergy with the Ministry of SOEs, namely Donggala Port, Pantoloan Port, and Wani Terminal. It is planned that the project will be financed using the Asian Development Bank (ADB) loan for the study and construction development.

The work itself is in the feasibility study stage, RIP, and the determination of the Work Environment Area (DLKr) / Environmental Interest Area (DLKp) which has been completed, and is waiting for a determination from the Ministry of Transportation with a total project value of Rp1.11 trillion. "In addition to developing ports that are included in PSN, in welcoming the integration of state-owned port operators, PT Pelindo IV is also carrying out transformations in several managed ports, one of which is the Port of Ambon," he explained.

The transformation at Ambon Port includes several initiatives, including overhauling business processes, equipment and facilities, IT systems, organizational structures, measuring performance, and improving the quality of human resources. This step is expected to increase the productivity of the Ambon Branch to 25 boxes per ship per hour, and cut working time from 3 days to 1 day. The result of the transformation will also cut costs for shipowners and become more efficient for goods. The Ambon Branch transformation was carried out to support infrastructure readiness related to the plan to make Maluku Province a national fishery barn.

 

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PT PELINDO 4 current project

Makassar New Port, South Sulawesi (Celebes) island

 

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PT PELINDO 1 latest project is Kuala Namu Port and Industrial Complex. It has just been operated in 2019. It is still in initial stage and the port will be developed further along with the industrial complex with the company ambition to make it the biggest port in Indonesia in the future.


They have strategic cooperation with Rotterdam port during the development

 
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Pelindo merger realizes Jokowi's hopes for Indonesia's port future
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Pelindo merger realizes Jokowi's hopes for Indonesia's port future

President Joko Widodo (right) and State-Owned Enterprises (SOEs) Minister Erick Thohir in the inauguration of the Pelindo merger. (ANTARA/HO-SOEs Ministry/rst)

This merger had been able to realize President Jokowi's hopes for these past seven years

Jakarta (ANTARA) - State-Owned Enterprises (SOEs) Minister Erick Thohir affirmed that Pelindo's merger had helped to realize President Joko Widodo's (Jokowi's) aspirations regarding Indonesia's readiness and competitiveness in the global market.

"This merger had been able to realize President Jokowi's hopes for these past seven years," Minister Thohir said as quoted from his official Instagram account @erickthohir on Friday.

The minister later noted that the merger of Pelindo I, II, III, and IV to create one entity Pelindo could cut logistics costs and strengthen maritime connectivity in a bid to make Indonesia more competitive.

As a result of the merger, Pelindo also becomes the eighth-largest container terminal operator in the world.


Related news: Boosting Indonesia's competitiveness globally through port integration

"Mr. President tells us that this merger is a big step that should be followed by other SOEs. Let us join our forces to strengthen our position in the industrial era 4.0," he affirmed.

President Jokowi had earlier conveyed that the merger of the four Pelindo companies will strengthen the state-owned port sector to become better, cheaper, and faster, as well as be able to boost Indonesia's competitiveness.

The president also requested that the merged state-owned Pelindo seek partners for port companies with extensive networks in a bid to help Indonesian goods to penetrate the global supply chain.


Related news: Labuan Bajo Port offers loading, unloading for 2,020-TEU containers

The president lauded SOE Minister Erick Thohir and several officials from SOEs for realizing this merger. As a result of this corporate action, SOE Pelindo became the eighth-largest container terminal operator in the world, with a total container flow or throughput of 16.7 million TEUs (twenty foot equivalent units).

The state-owned PT Pelabuhan Indonesia (Pelindo) earlier comprised Pelindo I, Pelindo II, Pelindo III, and Pelindo IV, with each of them operated in different ports.

President Jokowi merged the four port operators through Government Regulation Number 101 of 2021 on the Merger of PT Pelindo I, III, and IV into PT Pelabuhan Indonesia II. The regulation was signed by President Jokowi on October 1, 2021.

 

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Indonesia sneaks up on Singapore with flurry of port projects

Widodo envisions a new global shipping hub on China's Belt and Road

Port in Indonesia

(© Nikkei montage/Source photos by Reuters)

ERWIDA MAULIA, Nikkei staff writerJune 14, 2018 09:00 JST


GRESIK, Indonesia -- It may not look like much right now, but an 1,800-hectare tract of land on the eastern edge of Java symbolizes Indonesia's future.

The site, at the entrance to the busy Madura Strait, is to host the largest industrial park in East Java -- the Java Integrated Industrial and Ports Estate. It is still mostly deserted, but construction is gaining steam. And it is just one of dozens of port projects sprouting up around the country, as President Joko Widodo pushes to turn the archipelago into a fulcrum of maritime trade.

"Why do I like this area? Because it is an integrated area -- it has a port and an industrial zone," Widodo said at the opening ceremony for the first phase of the Java estate in March. "By being integrated with a deep-sea port, this park will have direct access to domestic and international markets."

After taking office in October 2014, Widodo endorsed a five-year, 700 trillion rupiah ($50.6 billion) plan to build up the maritime sector. This included 243 trillion rupiah for developing 24 "strategic ports."

Progress in the first half of his presidency was sluggish, but infrastructure development began to gather pace last year. Now, old ports are being revamped and new ones are being built as Indonesia strives to tackle its notoriously high logistics costs and become a transshipment hub capable of challenging Singapore's dominance.

The port at the Java estate will have a total berth length of 6.4km. Some sections will be deep enough to accommodate large cargo vessels with capacities up to 100,000 deadweight tons. This is expected to reduce loads at nearby Tanjung Perak, Indonesia's second-busiest port and the main logistics gateway to the nation's eastern provinces.

"At Tanjung Perak now, eight ships at a time have to queue to dock [at one spot]," a director of the estate project said in May. "Ships often have to wait for a week outside [the port] before docking. We should have [developed the new port] three or five years ago."

The integrated estate currently hosts seven small manufacturers, serving their logistics needs with a 200-meter jetty. The goal is to complete the estate by 2030, by which time the developers -- state-owned port operator Pelindo III and private partner AKR Corporindo -- expect to play host to nearly 200 companies.

Freeport Indonesia, the local unit of U.S. miner Freeport-McMoRan, is reportedly looking at the site as a potential location for its second smelter in the country.

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Widodo said he wants more estates that link plants and ports, since this will bring down the logistics costs that run to the equivalent of 24% of Indonesia's gross domestic product. That is significantly higher than the figures for most other countries in the region.The Widodo government wants to lower the number to 19% next year.

Logistics are particularly expensive in the eastern provinces, where infrastructure lags far behind other parts of the country. Port projects in remote cities like Makassar and Sorong are meant to tackle this challenge. Upgrades are needed to make room for cargo vessels, including ships operated under the president's signature Sea Highways program, which regularly sends goods to designated ports nationwide at subsidized cost.

Indonesia's 17,000 islands are home to more than 1,200 ports -- including around 110 cargo bases run by four state-owned companies, Pelindo I through IV. But past infrastructure development focused heavily on roads, leaving many aging ports with insufficient capacity. Sea transport currently accounts for just 6% of Indonesia's freight traffic, versus 45% by land and 30% by air.

The World Bank studied 18 Indonesian ports and, in a note issued in January, said they suffer from a "critical infrastructure gap."

"The quality of ports' infrastructure across the country is a weak factor in the overall country's competitiveness," the bank wrote.

Indonesia's port quality ranks 72nd in the latest Global Competitiveness Index issued by the World Economic Forum -- below neighbors Singapore, Malaysia and Thailand.

There are signs Indonesia is moving in the right direction. Transportation Minister Budi Sumadi said Tanjung Priok, the country's busiest port in Jakarta, has seen a throughput increase of 1 million 20-foot equivalent units a year following the completion of its first expansion phase.

"And after Kuala Tanjung starts operating, my target is to increase [Indonesia's] throughput by 3 million TEUs this year," Sumadi said last month, referring to another port in north Sumatra. He added that some of the extra volume is expected to come over from Singapore and Malaysia.

Over the past two years, Indonesia also has been developing bonded logistics centers across the country -- offering to waive import duties for goods stored in the centers. The head of the customs and excise office said in April that the new policy has drawn $606 million worth of inventory away from Singapore.
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The Teluk Lamong Terminal, a project by state operator Pelindo III, is billed as the country's first green and automated port. (Photo by Erwida Maulia)

Zaldy Masita, chairman of the Indonesian Logistics Association, said the centers are prompting a growing number of companies to move warehouses from the city-state. "We've received information from our partners that they've been offered discounts to [keep their cargo] in Singapore," Masita told reporters in April. "[The policy] is starting to change the logistics landscape in Southeast Asia." Funding is an issue, however.

The government has said the state budget can cover only a third of the 4,800 trillion rupiah worth of infrastructure needed in the 2015 to 2019 period. Officials in Jakarta have been actively inviting other countries to invest in ports.

The Netherlands' Port of Rotterdam Authority provided consulting to Pelindo I on the first development phase of Kuala Tanjung, and is reportedly planning to invest in the next phase. Last November, the Japanese government signed a 118.9 billion yen ($1 billion) loan for the construction of the Patimban deep-sea port, with a consortium of Japanese and Indonesian companies landing the construction contract.

Singaporean port operator PSA International has been involved in one project and may soon join another.
But China's Belt and Road infrastructure initiative is perhaps Indonesia's biggest hope.

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Widodo has repeatedly said his maritime vision can complement the Belt and Road. Beijing has expressed some interest in port investment: Ningbo Zhoushan Port and China Communications Construction Engineering Indonesia have signed memorandums of understanding with Indonesian port operators to jointly develop New Priok and Kendal International Port, respectively.

Yet no actual investments are known to have been made. Indonesia's Chief Maritime Minister Luhut Panjaitan was dispatched to Beijing in April to reiterate calls to invest in the Kuala Tanjung and Bitung international hub ports. He said he brought home $23.3 billion worth of deals -- but none for the port projects.

Some analysts think Indonesia is not a priority on the Belt and Road. "China has more immediate incentives to strengthen its trade routes in its neighboring countries first that are not separated by seas," brokerage Reliance Sekuritas Indonesia said in a note.

Nevertheless, Massimiliano Cali, senior economist for macro trade and investment at the World Bank, said financing may not be the key issue for major projects like Kuala Tanjung and Patimban.

"While it is true that these are big projects, their financing should not be a key constraint to the extent that they are commercially viable," Cali told the Nikkei Asian Review. "And both projects appear to have the potential to receive substantial traffic, which can eventually allow the repayment of the development costs."
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President Joko Widodo inspects a ship at Tanjung Priok Port in Jakarta in May. Indonesia is keen to advertise its growing ability to accommodate large containerships. (Photo courtesy of Indonesia’s presidential office)

Financing issues aside, Teuku Rezasyah, an international relations lecturer at Indonesia's Padjadjaran University, said the country must be cautious about allowing access to its ports. He specifically pointed to projects offered to China for Belt and Road investment that are located in areas with direct access to the disputed South China Sea.

The Belt and Road "can't be merely about infrastructure development; it has more strategic goals related directly to the South China Sea," Rezasyah said. "The Indonesian government is now being too hungry for investment ... but it must be extra careful."

Experts also stress Indonesia has a long way to go before it can expect to snatch significant chunks of the transshipment market from Singapore. And given the number of ongoing and planned port projects, there is concern about counterproductive competition.

"Ports in the region need to [take] a collaborative view and not a competitive one to gain collective advantages," said Gopal R, global vice president for transportation and logistics practice at Frost & Sullivan. "If the ports pitch one against another in the region, the advantage will only be incremental growth and not sustainable growth."

Despite the various worries, Widodo has another reason to push the port projects: the presidential election in April 2019.

The government is eager to show tangible progress before voters go to the polls. Despite delays in starting construction, a portion of the $3 billion Patimban project, which lies 120km east of Jakarta, is supposed to open next March.

Haste is the name of the game. Other infrastructure projects on densely populated Java have been rushed to meet deadlines and show voters that Widodo delivers results.

A new international airport in West Java, Indonesia's most populous province, and much of a new Trans-Java toll road are expected to be ready for the Islamic holiday of Idul Fitri later this week, when millions of people will travel to their hometowns.

 

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Indonesia private sector who will challenge PT Pelindo will likely be CT Corp. CT Corps is the operator of Indonesia future biggest port, Patimban port, that is located in West Java, Indonesia main location for industry. They will partner with Indika group which main business is coal mining.

Patimban port will be build in stages and will be completed in 2027 inshaAllah

Patimban Port construction.


CT Corp future leader is Chaerul Tanjung daughter

Putri Tanjung

View attachment 775021

INDIKA Group CEO, Arsyad Rasyid

View attachment 775022

Good data here, it shows two main port in Java, Tanjung Priok in Jakarta and Tanjung Perak in Surabaya, East Java has already been quite congested. This is why making Patimban port in West Java is the right decision.

1638027870030.png
 

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PT Pelindo 1 ( Sumatra island )

Belawan Port phase 2 construction. The contractors are also state owned companies (Hutama Karya (HK) and Wijaya Karya (Wika) )


Belawan City

 

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1643711722170.png


West Kalimantan

1643711775693.png


Kijing Terminal port, near Pontianak port ( river port ). West Kalimantan. Developed by PT Pelindo II (2) Constructor : PT Wijaya Karya, state owned company who has also become a conglomeration.


Progress


 

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More information about Kijing International port. The countainer will only be about 2 million TEUS but the large one is for bulk and liquid cargoes, each around 15 million TEUS. It is quite interesting that they prepare about 5000 hectare land for industrial complex. I believe those land are currently plantation that we can see surrounding the areas, it must be owned by our state owned agricultural holding, PT Perkebunan Nusantara or another state owned company focusing on trees plantation (PT Perhutani), similar like Batang industrial complex.

 

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Worker and engineers from PT Wijaya Karya doing preparation before working to build Kijing international port in West Kalimantan.

 

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Another port project in East Java, JIPE Port and Industrial Complex. Cooperation between Indonesia private sector with Pelindo III subsidiary company


 

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