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Pelindo III allocates $72m to revamp seven Indonesian ports

Pelindo III allocates $72m to revamp seven Indonesian ports
Indonesian state-owned port operator Pelindo III has allocated at least IDR1trn ($72.4m) to revamp seven seaports in the country’s eastern region, according to local reports.

Pelindo III president director Djarwo Surjanto said three ports were located in East Nusa Tenggara (Kalabahi Port, Lorens Say Maumere Port and Waingapu Port), while one was in West Nusa Tenggara (Sape Port in Bima), two were in Central Kalimantan (Sampit Port and Kumai Pangkalan Bun Port) and another was in South Kalimantan (Kota Baru Port).

“Currently, those seven ports are in poor condition and unsafe [for passengers]. Maumere Port, for example, is located too close to cargo loading and unloading terminals and therefore it is unsafe," Djarwo said.

Separately, Pelindo III’s operational and business development director Rahmat Satria said the renovation work would depend on the availability of funds. “If we are able to use a state capital injection [PMN] as initially planned, the renovation work at the ports could be completed in 2017. If we use internal cash, the renovations may take longer, until 2018 or 2019,” Rahmat explained.

The company originally planned to use a state capital injection to finance the revamp. However, as the House of Representatives has shelved some capital injections to state enterprises, the company may need to resort to other alternatives for financing.

“We’re now trying to fund the project with internal sources to avoid interest-ridden funding as the seven ports are small ones and therefore the income being generated from them is relatively meager,” Rahmat said. Pelindo III has also allocated IDR5trn of capital expenditure to develop its existing 46 ports, spread across seven provinces countrywide.