Shipping hub near Jakarta aims to speed up gridlock-prone logistics network
JAKARTA — Three Japanese and two Indonesian companies are set to win a $1.2 billion contract to build a port in West Java, Indonesia’s Ministry of Transportation said Sunday, as the country looks to improve a costly and inefficient logistics system.
The port of Patimban is part of a large-scale upgrading of the Java’s transport infrastructure, intended to take the pressure off Jakarta’s Tanjung Priok port and connect with the planned $4.5bn upgrade of the 750km Jakarta–Surabaya rail line.
The contract, worth $1.2 bn, will go to Tokyo contractors Penta-Ocean, Toa Corporation and Rinkai Nissan Construction; the Indonesian companies will be Wijaya Karya, which is 65% state owned, and Jakarta-based Pembangunan Perumahan.
Transportation Minister Budi Karya Sumadi met executives from the consortium on Sunday near the site to notify them formally of their selection.
These companies will handle part of the project’s first phase and will break ground as early as next month.
Costing $3bn in total, the port is expected to have an annual capacity of 7.5 million TEU containers when fully complete in 2027, making it comparable to Antwerp or Los Angeles. It may be able to begin operations as early as next March, one month before Indonesia’s presidential election.
The port is intended as a transhipment hub for Southeast Asia, and to improve Java’s sclerotic transport networks. According to the Nikkei Asian Review, logistics costs account for well over 20% of the country’s GDP.
One group of beneficiaries will be Japanese car makers at the Karawang Industrial Estate, about 70km west of the port site.
The decision to move ahead with the scheme followed a meeting between Shinzo Abe, the prime minister of Japan, and Indonesian President Joko Widodo at a G7 meeting in Japan in May 2016. The Japan International Cooperation Agency has given the Indonesian government a $1bn loan towards the cost of the scheme.
Elsewhere, in April, a joint venture between Penta-Ocean and Dutch contractor Boskalis was awarded a $890m contract to reclaim land off the coast of Singapore. The construction period of the project is four years and will add 810ha to the island by April 2022.