JAKARTA (TheInsiderStories) - State owned port operator PT Pelabuhan Indonesia (Pelindo) III is considering to issue bond and seeks loan up to Rp10 trillion ($714.26 million) to fund the financing gap of the development of 25 ports in the next five years.
According to Pelindo III’s president director Djarwo Surjanto, the company needs investments up to Rp20 trillion to build the ports until 2020. Currently, he added, Pelindo III had Rp 11 trillion in capital.
He explained, at least there are nine ports that require immediate improvement and development, including Kalabahi Port in Alor and Waingapu Port in Bima, West Nusa Tenggara.
Pelindo III is one of state owned enterprises which may get capital injection in State Budget of 2016 with worth Rp 1 trillion to fund the construction of small ports in Maumere, Waingapu, Kupang and Kalabahi in East Nusa Tenggara, Bima in West Nusa Tenggara, Kotabaru in South Kalimantan and Kumai in Central Kalimantan.
State Own Enterprises (SOEs) Minister Rini Soemarno has stated to boost the development of port in the country, port operators Pelindo I to IV need to synergize. She said, the ministry may also create virtual holding entity for those port operators.
“The joint venture between them is actually a step which will later could transform into a holding company,” Rini stated.
CEO of PT Pelindo II Richard Joost Lino added that the company he works for, will help investment financing of Pelindo I and IV by forming a new subsidiary between them. Pelindo II itself plans to build 22 ports across the country with total investment over Rp70 trillion ($5.0 billion).
Currently, the company has operated 14 ports, mostly located in western part of Indonesia. Lino said, the company will start to develop Cikarang Bekasi Dry Port and Cikampek Port in West Java, Muara Jati Port in Cirebon in West Java, Bojonegoro Port in East Java, Tanjung Carat Port in South Sumatera, Kijing Port in West Kalimantan and Sorong Port in West Papua province. All of the ports are expected to be completed in two years time.
These projects will have total capacity of around 2.5 million twenty-foot equivalent units (TEUs). Now, the largest port in the country Tanjung Priok Port in Jakarta province has existing capacity of 5 million TEUs.
Cikarang Port will be developed on 200 hectares of land and will have length of 79 meters and with docking capacity of up to five million containers per year. Later on, Cikarang Port will be connecting with Cikampek Port in West Java and Cirebon Port in Central Java.
According to Lino, the company will finance the projects from internal cash and loans. As of today, the company has cash on hand of around Rp19.5 trillion from bond issuances, bank loans and internal cash flow.
In May 2015, Pelindo II has raised $1.6 billion and plans to raise another $1 billion from U.S. dollar bond issuance in the end of 2016 or early 2017.
Pelindo II, which operates ports in the country’s western and central regions, previously secured a $2.5 billion loan from foreign banks such as Mitsui & Co. Ltd, Deutsche Bank, ANZ, Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation, Mizuho Bank, Societe Generale and United Overseas Bank.
Pelindo’s expansion program is to support the government’s long-term plan to make the country as a maritime axis. President Joko Widodo has taken a firm stance that his administration would place a particular focus on developing the country’s maritime potential.