Four Pelindos setting up container business to cut logistics costs

Nurfika Osman, The Jakarta Post, Jakarta | Business | Wed, July 25 2012

Paper Edition | Page: 14

Four state-owned port operators Pelindo I to Pelindo IV are setting up a subsidiary focusing on container business called PT Peti Kemas Indonesia in the near future, State-Owned Enterprises Minister Dahlan Iskan said in Jakarta on Tuesday.

“Container business in Indonesia is growing due to healthy economic growth. I believe this is a good project that will benefit all of us,” Dahlan told reporters after a weekly meeting with state-owned enterprises directors in Gambir train station, Central Jakarta.

He said that Pelindo and his ministry were calculating the investment required to set up the new company. “I hope we can finish the calculations some time this week,” he said.

Contacted separately, Richard Joost Lino, president director of Pelindo II, which recently unveiled its new name — Indonesian Port Corporation (IPC), said his company was ready to inject investment into the new project.

“We are ready to pour investment in the new subsidiary because it will help reduce logistics costs,” Lino said. “We expect to reduce costs by up to 50 percent.”

According to the Indonesian Logistics Association (ALI), Indonesia’s logistics costs are between 25 and 30 percent of GDP, among the highest of any Southeast Asian country.

That figure is higher than in Thailand and Singapore, which stand at 16 percent and 10 percent, respectively.

Recent data from the World Bank Logistics Performance Index also ranked Indonesia 59th of 155 countries surveyed, behind Malaysia (29th), Thailand (38th), the Philippines (52th) and Vietnam (53rd).

Lino said that PT Peti Kemas Indonesia would operate in six main ports across the country, called Pendulum Nusantara: Belawan in North Sumatra, Batam in Riau Islands, Tanjung Priok in Jakarta, Tanjung Perak in East Java, Makassar Port in South Sulawesi, and Sorong Port in West Papua.

He said Pelindo I to IV were preparing to accommodate the new business by deepening their drafts and fixing the waterways and channels.

In Belawan Port for instance, Pelindo I is dredging its draft from 9 meters to 13 meters.

“All ports should have a draft of at least 13 meters to handle ships with 3,000 TEUs [twenty-foot-equivalent-unit] capacities,” he said.

Dahlan declined to give the value of the investment but Lino said a ballpark figure would be Rp 2 trillion (US$210 million).

He said that PT Peti Kemas Indonesia was expected to be up and running in early 2014.

Deputy Transportation Minister Bambang Susantono said his ministry along with the SOE Ministry, Finance Ministry, and the four Pelindos are studying the Pendulum Nusantara system.

Bambang said that the six main ports would become the country’s sea main corridor to help boost the economy.

“Pendulum Nusantara ports will not only help us reduce logistics costs but also connect one port to another in an integrated system,” he said.

The government and the enterprises expected a domino effect from the investment in the six ports, pushing the wheel of trade in the surrounding areas.