Patimban Project - Photo by CMMA

JAKARTA (TheInsiderStories) – Transportation Minister Budi Karya Sumadi said that his ministry will announce the winning bidder of Patimban Port project in Subang, West Java in Early May. This port is targeted to begin construction in June 2018 and completed in 2020.

The port will be located about 70 kilometers from the Karawang Industrial Estate and Bekasi in West Java, where many Japanese industrial firms, particularly automotive and electronics manufacturers operate.

The ministry has chosen two consortium as preferred bidders for the project. One is Penta Ocean Construction Co., Ltd. of Japan, which joined concert with three Indonesian state-owned construction companies PT Wijaya Karya Tbk (IDX: WIKA), PT PP Tbk (IDX: PTPP) and PT Adhi Karya Tbk ( IDX: ADHI). The other bidder also Japanese investor joined with local investors.

Minister Sumadi had said the operator of Patimban must be 51 percent-owned by a local entity and 49 percent by Japan. The local entity can be a combination between state-owned enterprises and a private company.

He had said there were at least three companies interested in becoming a Patimban operator, namely state-owned port operator PT Pelabuhan Indonesia (Pelindo) II, local diversified conglomerate PT Astra Internasional Tbk (IDX: ASII), Japan’s Toyota Motor Corp. and Mitsubishi Corp.

“We expect one bidder [to win]. Within two weeks it [the winner] will be announced. If for instance will be announced later in May, then the latest is we will start [construction] in July, “said Budi told reporters after a limited ministerial meeting on evaluation of the government’s National Strategic Projects at the Presidential Office on Monday (16/4).

Previously, Japanese and Indonesian Government had signed Rp15 trillion (US$1.11 billion) in loan deal to help finance construction of Patimban, the Ministry of Foreign Affairs reported.

Kozo Honsei Deputy Chief of Mission Embassy of Japan has said the project will be funded mostly by the Japan International Cooperation Agency (JICA) under a 40 years tenor loan worth US$1,09 billion or ¥118 billion with interest rate of 0.1 per cent for the first phase and will be disbursed as soon as the project start constructing on 2018.

The Port of Patimban is set to commence gradually and start to operate in March 2019. The first stage of is the construction of the port and a 8.1 kilometer road access connecting Patimban and north coasts line. The project will require 570 hectares of land, and the acquisition will be funded using the State Budget. It will cost Rp500 billion ($37 million).

Senior Representative of JICA Kawabata Tomoyuki had said the first stage of works will include terminal, sea wall, channel dredging and connecting bridge. Indonesian government will hold a tender to appoint the operator of the port.

The second stage of development involve road access to the Port of Patimban, which connects Subang with the national road and Cikopo – Palimanan toll road in West Java. This phase is still being discussed with JICA. The project’s second phase, and a 40 km road access will cost around Rp5.35 trillion. Constructon is set to begin in 2020.

Indonesia hopes the port, once in operational, will help stimulate its automotive exports by 30 per cent. The port will have the capacity to handle 1.5 million 20-foot equivalent units (TEUs) of containers once it is partly complete in 2019 and 7.5 million TEUs by 2027.

The Patimban Port project is one of several Indonesia’s flagship projects being done in collaboration Japan, a long-time investor for the countey that is now intensely seeking a stronger grip on infrastructure in Southeast Asia’s largest economy.

Indonesia and Japan have agreed to increase their cooperation as the two countries celebrate a 60-year anniversary of diplomatic relations next year. In the meeting with Prime Minister of Japan Sinzo Abe in Manila, Philippines, President Joko Widodo said that next year Indonesia and Japan will celebrate their anniversary with the theme of ‘Modern Technology’.

Indonesia called on Japan to open access for Indonesia’s agriculture and fisheries products, to finish the review of Double Tax Avoidance Agreement, improve access and capacity for Indonesian nurses to meet Japan’s standards, to start a general review of the Indonesian-Japanese Economic Partnership Agreement this year.

Indonesia also asked Japan to consider a plan to increase air connectivity by opening PT Garuda Indonesia Tbk (IDX: GIAA) flight service to Los Angeles in U.S via Tokyo in Japan.

The two countries also agreed to enhance cooperation on the economy, including a plan to develop Masela Block, to conduct initial discussions on the construction of a Jakarta-Surabaya high-speed train, and to further cooperation on integrated marine and fisheries center development in frontier islands of Indonesia.

Indonesia has become a ‘golden place’ for overseas Japanese investors. In recent years, the economic partnership between Indonesia and Japan has strengthened and grown rapidly.

Japan has more investments in Indonesia than any other Southeast Asian country, and according to data from Indonesia’s Investment Coordinating Board, investment from Japan to Indonesia has increased considerably, totaling $5.4 billion in 2016 and with an average growth rate of 30 percent.

Email: linda.silaen@theinsiderstories.com

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The Insider Stories Founder Linda Silaen has a solid, proven history, established over more than a decade as a journalist with a leading internasional news organization, of being the first with the biggest economic news stories in Indonesia. Specializing in corporate news, Linda is also a veteran of some of the biggest macroeconomic and general news stories as Indonesia rapidly transforms into a major market economy. One of the founders of the original blog from which this company developed, Linda’s knowledge of investors’ information communications and data us developed from unrivaled networking skills that make her a well-known name among CEOs, bankers, government officials and private equity investors both in Indonesia and other countries.

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