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Pelindo III allocates $72.4m to renovate 7 ports in eastern Indonesia

Pelindo III allocates $72.4m to renovate 7 ports in eastern Indonesia

JAKARTA: State-owned port operator PT Pelabuhan Indonesia (Pelindo) III has allocated at least Rp 1 trillion (US$72.4 million) to revamp seven seaports in the country’s eastern region.

Pelindo III president director Djarwo Surjanto said three ports were located in East Nusa Tenggara (Kalabahi Port, Lorens Say Maumere Port and Waingapu Port), while one was in West Nusa Tenggara (Sape Port in Bima), two were in Central Kalimantan (Sampit Port and Kumai Pangkalan Bun Port) and another was in South Kalimantan (Kota Baru Port).

“Currently, those seven ports are in poor condition and unsafe [for passengers]. Maumere Port, for example, is located too close to cargo loading and unloading terminals and therefore it is unsafe. We have to relocate some passenger ports,” Djarwo said on the sidelines of the launch of the new Manyar Port in Gresik, East Java, over the weekend.

Separately, Pelindo III’s operational and business development director Rahmat Satria said the renovation work would depend on the availability of funds.

“If we are able to use a state capital injection [PMN] as initially planned, the renovation work at the ports could be completed in 2017. If we use internal cash, the renovations may take longer, until 2018 or 2019,” Rahmat said on Sunday over the phone.

The company originally planned to use a state capital injection to finance the revamp. However, as the House of Representatives has shelved some capital injections to state enterprises, the company may need to resort to other alternatives for financing.

“We’re now trying to fund the project with internal sources to avoid interest-ridden funding as the seven ports are small ones and therefore the income being generated from them is relatively meager,” Rahmat said.

Besides the seven ports, the firm also plans to develop Benoa Port in Bali as a hub for cruises.

“Currently the [60-hectare] port is only used as a transit berth for big cruises from Singapore. We need to expand the port to allow big cruises to dock,” Rahmat added.

“We are awaiting the Bali administration’s approval for the Port Master Plan [RPP] prior to applying for a reclamation permit [to expand the existing port],” he said.

Pelindo III has also allocated Rp 5 trillion of capital expenditure to develop its existing 46 ports, spread across seven provinces countrywide.

One of the development projects this year includes the newest Manyar Port in Gresik, East Java, as part of the Integrated Industrial Port Estate (JIIPE).

Manyar Port was launched on Friday and is projected to operate by the middle of this year.

The international port aims to ease logistics loads at Tanjung Perak Port in Surabaya, East Java. It is estimated to reduce the province’s logistics costs by 20 percent in future.

The industrial estate itself, meanwhile, is still under construction and is expected to maximize the port’s functions once completed.

The JIIPE owner, PT Berkah Kawasan Manyar Sejahtera, is a joint venture between Pelindo III and petroleum and chemical distributor PT AKR Corporindo.