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Japan likely to remain involved in new seaport project

Thursday, 18 February 2016 | 17:00

The government will soon revive a plan to develop a port on Java’s northern coastline after cancelling the construction plan of the Japanese-funded Cilamaya port in Karawang, West Java because of issues related to its proposed location.

A National Development Planning Board (Bappenas) official said government representatives will soon talk with their Japanese counterparts about the financing for a port to replace the Cilamaya project.

Bappenas’ director for transportation, Bambang Prihartono, said he was slated to meet a representative from the Japan International Cooperation Agency (JICA) next week about the possible investment from Japan.

He said the new seaport project would be developed in a public-private partnership (PPP) scheme, with the government relying on loans for the project, in contrast to the previous plan.

“The amount is still under discussion. It could be complimented by the state budget. We need to know how much they are willing to lend and our capacity to borrow,” Bambang said over the phone on Sunday.

He said the private sector will be involved in the port project as it would still be open for tenders, as reported previously.

It was feared the tendering process would strain the relationship between Jakarta and Tokyo, since the Japanese government previously thought it would secure the now cancelled project and JICA had conducted a feasibility study that cost between US$2.5 million and $3 million.

Vice President Jusuf Kalla scrapped the Cilamaya project because of concerns it would affect the expansion of state oil and gas firm Pertamina’s nearby offshore operations.

Bambang said the government had picked an area in Subang as the new location of the port. Subang is a regency about 50 kilometers east of Karawang.

“We have just been looking for the funds and the feasibility study and the detailed engineering designs will follow afterwards,” he said.

He said that the tendering process would likely to take a while as the government needed to put the project in its soon-to-be launched Blue Book, which lists the country’s public-private partnership projects.

The government previously aimed for the project to be fully funded by the private sector to reduce state expenditures.

It is rumored that one reason the government is looking at private-sector involvement is that Japan offered to invest in the form of a loan, an idea disliked by both President Joko “Jokowi” Widodo and Transportation Minister Ignasius Jonan, who paid a visit to Tokyo in December to discuss the port project, among other topics.

The planned port, which needs an initial investment of more than $1.2 billion for the first phase of construction, will have the capacity to serve 3.75 million 20-foot equivalent units (TEUs) containers, or more than two-thirds the capacity of Indonesia’s largest port, Tanjung Priok in North Jakarta.

The port was also recently included in the list of 30 priority infrastructure projects for the country, backed up by Presidential Regulation No. 3/2016, which also instructs related government officials to help accelerate the development of projects by speeding up the issuance of the required permits.

The 30 projects, which also include the Manado-Bitung toll highway in North Sulawesi, are expected to be finished within the next four years to help boost economic growth.

Bambang said the government aimed to accelerate the issuance of permits for the seaport project, such as the environmental impact analysis, so construction can start during Jokowi’s administration. “The construction will take a while and may finish after 2019, but the construction should start soon,” he said.
Source: The Jakarta Post

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