Port developments to support connectivity

 25 April 2014   

Indonesia needs to develop Kuala Tanjung Port in North Sumatra and Bitung Port in North Sulawesi and make them into international hubs to facilitate the growing traffic of people and goods as a result of the ASEAN single market as from 2015, an expert says.

Committee for the Expansion and Acceleration of Indonesian Economic Growth (KP3EI) spokesman Edib Muslim said on Thursday that Indonesia had to develop its domestic maritime connectivity if it wanted to take advantage of the ASEAN Economic Community.

“The country’s economic development acceleration should be based on maritime connectivity, and the government should boost economic growth outside Java Island,” Edib said during a discussion on Asia-Pacific Connectivity.

“By making Bitung and Kuala Tanjung our main gateways, the government would not only evenly distribute economic activity but also help the implementation of the cabotage principle,” he said.

“Prior to entering ASEAN free trade, the government should issue a regulation requiring all foreign ships to dock at Kuala Tanjung and Bitung, and not directly enter Tanjung Priok [in North Jakarta],” he said.

Ministers from ASEAN countries have agreed to promote several main routes to better connect the region through sea transportation. Dumai-Malaka, Belawan-Phuket and Bitung-Santos are among routes that are set to be strengthened from January 2015.

Indonesia is expected to produce more vessels, especially roll-on/roll-off (RORO) and commercial ships, ahead of ASEAN connectivity, as RORO and commercial ships would be in higher demand in the eastern part of the country, such as Maluku and Papua, to better transport both people and goods.

Indonesia’s permanent representative to ASEAN, I Gede Ngurah Swajaya, said the country had completed a feasibility study for RORO operation connecting Bitung and Santos.

“We see great potential in operating vessels connecting Bitung with Santos [the Philippines] as well as with Brunei and Malaysia to support ASEAN as the center of production and distribution,” Ngurah said.

Ngurah said that regional connectivity should be used to encourage the acceleration of domestic connectivity and that the government’s Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI) should be completed hand in hand with ASEAN connectivity projects.

“One of the key challenges is actually the institutional connectivity as each country obviously wants to protect its own interests,” he said.

As previously reported, state-owned port operator PT Pelabuhan Indonesia I (Pelindo I) plans to begin the construction of Kuala Tanjung Port in North Sumatra this year.

In the first phase, the port will be built with a capacity of 1 million TEUs, and the construction is projected to be completed in 18 months. The company has allocated Rp 5 trillion in capital expenditure this year, including for the port’s construction.

According to the MP3EI, Bitung Port will become an international hub in eastern Indonesia for destination nations in East Asia, the Americas and Australia. State-owned port company PT Pelindo IV is currently expanding the port’s terminal and its berthing facility to help accommodate more container traffic.