Port © DP World
Ports in Indonesia are relatively small compared to other countries in South East Asia and require improvements. This is of particular concern as sea transportation is a vital aspect of the country’s trading infrastructure, carrying over 90% of internationally traded goods. Additionally, the inter-island shipping services about 14 million passengers a year and over 300 million tons of cargo volume.
There are hundreds of small ports throughout Indonesia. Of these, 111 are commercial ports operated by state-owned companies, PT Pelindo I, II, III and IV while only 11 are container ports.
Indonesia lacks large scale ports capable of receiving trans-oceanic vessels and the limited port capacity has created a highly inefficient system. As a result, much of Indonesia’s cargo has to go through Malaysia and Singapore. High transaction costs due to port inefficiencies, congestion and border transactions are one of the largest obstacles that prevent Indonesian firms and consumers reaping the full advantage of growing global international trade linkages.
Jakarta’s Tanjung Priok port, through which 70% of Indonesia’s container exports and imports pass, is the main international gateway and a major gateway for domestic trade. Limited capacities, congestion and low level of productivity at the port hamper exports and the domestic distribution of products. In 2012, it handled 6.2 million TEUs.
The need to upgrade facilities is recognised by the government and a new drive is underway as part of the national infrastructure development master plan. New ports are being planned to relieve some of the congestion.
The Master Plan includes explicitly the urgent need for a major expansion of Tanjung Priok port. The solution selected was to procure a joint-venture with a foreign investor via a long-term concession on a PPP basis. The US$ 4 billion New Priok (the official name of the new port) project includes 7 container terminals (annual handling capacity of 1.5 million TEUs for each terminal) and 2 petroleum product terminals (annual handling capacity of 500,000 m3/year for each terminal) constructed in two phases. Currently the first container terminal is under construction and the second container terminal is in the procurement process.
The current estimated timeline:
Phase 1 (2014-2017):
Container Terminal 1: Operational 2014
Container Terminal 2: Operational 2016
Container Terminal 3: Operational 2017
Product Terminals 1 and 2: Operational 2016
Phase 2 (2018 – 2023):
Container Terminals 4, 5, 6 and 7
Further upgrade plans under PT Pelindo I, II, III and IV are underway, including capacity expansion of a new terminal in Sorong (Papua), Cimalaya (West Java), a new port in Lamong Bay (Surabaya, East Java).
The opportunities are in the areas of:
Consultancy (e.g. port master planning, due diligence, environmental consultancy, maritime operations and IT systems, financing and PPP legal)
Terminal construction and operations (e.g. substructure and superstructure ancillaries, storage, berthing facilities, quayside equipment, operations management/ stevedoring, customs equipment, material handling equipment, training simulators and educational)
Maritime (e.g. dredging, maritime control systems, navigation aids)
Getting into the market
Presidential Regulation No. 54/2010 which came into effect on 1 January, 2011 governs, among others, procurements by ministries, state-owned enterprises, funded in part or entirely from domestic loans or grants received by the government, financed in part or entirely from international loans or grants.
Public tender is the standard method of procurement. In all public tenders, information is published on the procuring entity’s website, the formal notice boards, increasingly, the Electronic Procurement Service portals.
Foreign companies are allowed to bid in cooperation with a national company (unless no national company has the ability to provide the goods or services requested) and only on bids that exceed a certain threshold e.g. IDR 100 billion (approximately US$ 10 million) for construction services.
Most companies use the website of the National Public Procurement Office and printed media as a source of information about calls for tenders.
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.
Lian Jap, British Embassy Jakarta, Indonesia. Tel: +62 21 2356 5265; Fax: +62 21 2356 5352; Email: email@example.com
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.
Indonesia Int’l Infrastructure, Conference & Exhibition 2013
13-15 November, 2013
Topics: Getting Started