Indonesia’s Patimban Port operator to be announced imminently

With just a few days to go before a decision needs to be made, Japanese conglomerate Mitsubishi looks to be the leading contender for the construction and operation of Indonesia's Patimban Port.

Local reports said the government wants to appoint a private Japanese company to team up with state-owned port operator Pelindo II to build the by the time the Japanese prime minister visits the country on 15 January.

“We hope there’s going to be a decision in the next few days about who will be our partner from Japan so that we can seal two deals by the time we meet Japanese Prime Minister Shinzo Abe,” Transportation Minister Budi Karya Sumadi said.

Construction is expected to begin on the port by the end of the year and it should reach its first phase operational capacity of 1.5m teu by 2019 and full 7.5m teu capacity by 2027. This potential expansion, is expected to alleviate congestion at the main Tanjung Priok Port in Jakarta.

Indonesia hopes to sign two deals, one with the Japan International Cooperation Agency (JICA), through which the expected $1.7bn in financing from Japan will flow,  and a second with a private Japanese company that will construct and operate Patimban Port, during Abe's visit.

“We expect that the detailed engineering design for the port can be completed in the third quarter of this year. The groundbreaking ceremony is slated for the fourth quarter,” Budi said.

The total investment value for the Patimban project is estimated at around IDR40trn ($3bn). The Indonesian government is expected to control a 51% majority stake in the project, in which Pelindo II will own 10% with investment worth IDR4trn.

The government also expects transfer of port management expertise from the Japanese partners to their Indonesian counterparts.

Posted 10 January 2017

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Vincent Wee

Hong Kong and SE Asia Correspondent, Seatrade Maritime News

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