Transportation Minister Ignasius Jonan says the much-anticipated Cilamaya Port project in Karawang, West Java should be continued, as long as the project is funded by the private sector.
The minister said the port was necessary both to support the government’s sea highway initiative and to create a competitive business climate for port operators in the country.
“The port is aimed at easing the business process for the surrounding industrial estate; therefore, the investment should come from the private sector that has the interest,” Jonan said during a discussion with the Indonesian Chamber of Commerce and Industry (Kadin) said.
“I don’t want a G-to-G [government-to-government] loan agreement with Japan to be used to fund the port construction,” Jonan said.
The government would only provide funds for the port’s breakwater project and other projects that the central government was tasked to do, according to Jonan.
“The government will focus on constructing ports that are not commercially viable for the private sector in order to expand the economies of less developed areas,” Jonan said.
The minister said that the Japanese Ambassador to Indonesia, Yasuaki Tanizaki, had met with the new administration and offered assistance to develop and construct the port if it was needed.
As reported earlier, the ambassador had asked the government to speed up the construction of the port in order to facilitate the smooth flow of industrial goods in and out of Indonesia.
The establishment of Cilamaya Port is one of the five flagship projects under the Metropolitan Priority Area (MPA) for Investment and Industry included in bilateral cooperation between Indonesia and Japan.
The port, which will occupy 2,000 hectares of land in Karawang regency, is expected to facilitate the movement of goods from the industrial estates in the surrounding area that house automotive, electronics, machinery and information technology manufacturers.
Currently, it takes up to eight hours for manufacturers in Karawang’s industrial estates, including Japan’s major automakers Toyota and Daihatsu, to transport their vehicles and autoparts to the country’s main port at Tanjung Priok in North Jakarta.
Jonan, however, said that state-owned port operator Pelindo II president director R.J. Lino protested the government’s plan to continue the port project, as the port operator is currently undertaking a US$2.1 billion expansion project in Tanjung Priok to construct the Kalibaru Port.
Lino previously said that the Cilamaya Port would end his business at Tanjung Priok.
“Competition is necessary to improve business, as I have told Pak Lino,” Jonan argued.
In August, the government announced possible plans to scrap the Cilamaya Port project because of concerns that hundreds of hectares of rice paddies would be lost in order to accommodate construction.
Another issue that hinders the project is the fact that state-run oil and gas company PT Pertamina would have to relocate its offshore plant to West Java if the Cilamaya Port is constructed.
Pertamina’s plant relocation would affect the oil supply to electricity firm, PT Perusahaan Listrik Negara (PLN), which would decrease the availability of electricity for the capital city and surrounding areas.