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Jakarta now seen partly funding West Java port project from State budget

Jakarta now seen partly funding West Java port project from State budget
In a somewhat confusing policy flip flop, local media reported that the Indonesian government is set to use the state budget to fund the new Patimban deep sea port project in Subang, West Java but it is hoping to get loans from Japan to help with some of the overall cost. 

This changes the original plan to put the project out to private investors which is also an adaptation of the original plan to build the port at Cilamaya.

Indonesia is currently negotiating with Japan for a loan worth $2.49bn for the project, while around $600m will also be allocated in the state budget for land procurement and road construction around the port, according to the Transportation Ministry.

“We will eventually use the state budget to cover all the funds needed for the project,” the Transportation Ministry’s port and dredging director, Mauritz Sibarani, was quoted as saying.

Mauritz said that the use of the state budget was intended to make the port fully owned by the government and that private counterparts would just operate the port after it was completed.

The ministry was still awaiting the Japanese decision on loans for the project , adding that the port developer would "very likely" come from Japan if the loan, expected to be a 0.25% coupon 40-year term came through. The total cost of the project is estimated to reach $3.09bn and will be the biggest project funded by the Japanese government in Indonesia.

"We will do a bidding process, but they [Japan] are likely to bring their own workers. There is a big chance that if they give us the loan, they will win the tender,” he said, adding that the loan deal was expected to be signed by the end of the year and groundbreaking on the project scheduled for 2017.

It is hoped the port will begin its first phase of operations by 2019 with an initial capacity of 250,000 teu, which will then be expanded to 7.5m teu by 2037.

Japanese manufacturing giants, such as Toyota and Honda, with plants in the Bekasi and Kerawang manufacturing hubs will benefit from the good location of the planned port.