Indonesia's Pelindo II defies directive to cancel new JICT contract with HPH

The deal to operate JICT, Indonesia’s largest container terminal, until 2039 was recently sealed and director general for sea transportation, Bobby Mamahit, had previously said that the port operator should have secured permission from the ministry to renew the contract and had thus failed to comply with government procedures for contract renewal, according to local media.

Pelindo II president director Richard Lino however countered that the land JICT is on is owned by the company and is not government land as as such is not subject to government approval. “Why should we ask for the government’s permission to renew our cooperation with our partners?” he was quoted as saying. “We have obtained the rights to control the land, therefore they [the ministry] should not interfere in our cooperation with our partners,” Lino added.

The original contract of the joint venture between Pelindo II and HPH established in 1999 was due to expire by 2019, but Pelindo II renegotiated early partly to secure funding for its Kalibaru Port extension.Under the new contract, Pelindo II has increased its stake in JICT to 51% from the previous 49% and HPH will have to pay $250m in advances to Pelindo II, while also having its rent doubled to $120m a year from $60m previously.

“More than half of the $250m advance will be used to accelerate the construction of Kalibaru,” said corporate secretary, Rima Noviyanti.