$2.4 bln North Jakarta port project faces delays over missing permits
The Rp 22.6 trillion ($2.4 billion) expansion of Tanjung Priok Port in North Jakarta is facing delays because of the failure of the Transportation Ministry to issue concession permits, a senior executive at state port operator Pelindo II has told Investor Daily newspaper.
“We won’t have a groundbreaking for the Kalibaru project until the concession permits we requested from the Directorate General of Sea Transportation last June are released,” Richard J. Lino, president director of Pelindo II, said.
The Kalibaru project will involve the construction of a Rp 22.6 trillion port, called New Priok, in Kalibaru, seven kilometers west of Tanjung Priok. The project will include three container terminals, an oil and gas terminal and a seven-kilometer toll road linking it to Tanjung Priok. Pelindo II was appointed by the government to build and operate Kalibaru.
Pelindo II is demanding a 99-year concession to operate the port. It says the length of the concession is fair given the massive investment to build the port. New Priok will cover 2,500 hectares of land and will have an annual capacity for 4.5 million twenty-foot equivalent units (TEUs).
Rima Novianti, the corporate secretary at Pelindo II, said on Sunday that the company was still confident the project could start soon.
Leon Muhammad, director general for sea transportation at the Transportation Ministry, said on June 19 that they were looking at Pelindo II’s demand.
He used the phrase that the government “does not want to buy a cat in a bag.” He said the government also wanted to prevent any monopolistic practices in the operation of ports, and added that officials wanted time to observe any environmental impacts from the port’s construction.
Lino said the ministry had failed to meet deadlines set by the presidential decree that gave his company the contract for the project.
He said the decree was signed by President Susilo Bambang Yudhoyono and had been effective since April 2012. He said the ministry was required to issue the necessary permits, including the concession permits, within a month after Pelindo II submitted its development and operational plan to the ministry.
“Now it has been nearly two months and we have not seen anything about the 99-year concession request we submitted,” Lino said.
He said he was confused about the ministry’s hesitancy to issue the permits. Pelindo II is 100 percent owned by the government, he said, so all benefits will go to the state budget.
Bambang S. Ervan, a spokesman at the ministry, told Investor Daily that the ministry was not dragging its feet on the permits. “The Transportation Ministry cares about the Kalibaru project. It is our responsibility to make sure things go right,” he said.
He said Pelindo II already had a construction permit and could break ground on the project without the concession permits. “It can be done,” he said. “They can take care of the concession permits while simultaneously working on the project.”
He said, however, that a 99-year concession is “too long” and “the government is still studying the ideal period.”
This, he said, cannot be done by the Transportation Ministry alone. It must be discussed with the National Planning Agency, the Finance Ministry, the Coordinating Ministry of the Economy and the Public Works Ministry.
Bambang said approving a 99-year concession would breach a government regulation from 2008 that says the government can only retain control of public infrastructure facilities for the up to 50 years.
