President Considers Using Japanese Funds to Build Patimban Port

President Joko Widodo has approved plans to build a major port on the north coast of West Java. One option is to construct the port in the Patimban area in Subang regency to replace Cilamaya Port, because the latter has the potential to disrupt oil and gas infrastructure near the site.

The President stated that aside from building ports in eastern Indonesia, the government plans to build a new port in Java because the three existing major ports on the island – Tanjung Priok, Tanjung Emas in Semarang, and Tanjung Perak in Surabaya – are almost at full capacity. "We need a major port on the north coast of Java with a capacity of around 7.5 million TEUs by 2037 to improve the efficiency of transport and logistics," said Widodo when opening a closed meeting on the plan of development for the Patimban Port at the Presidential Office, Monday (2/5) .

The presence of the new port is expected to cut the distribution lines to avoid having to use an overland route. However, before making a decision, the President asked the Minister of Transport Ignasius Jonan to explain the study results first. The study includes a feasibility study of building a port in Patimban as seen from the technical, legal, funding scheme, and other aspects.

(Read: Bappenas: Only Japan Interested in Funding Patimban Port)

After the meeting, which was also attended by Vice President Jusuf Kalla, Coordinating Minister for Maritime Affairs Rizal Ramli, Minister of Public Works and Public Housing Mochamad Basuki Hadimuljono, and Minister of Maritime Affairs and Fisheries Susi Pudjiastuti, Jonan said that the Ministry of Transport had conducted a feasibility study to assess six locations on the north coast West Java. The results found Patimban to be the most suitable location for the construction of a large port.

He said that, if approved by the President, the plan of development of the Patimban Port will use inter-governmental financing schemes. Construction is expected to start around the beginning of next year, and it will commence its first phase operations in 2019 with an initial capacity of approximately 1.5 million TEUs.

(Read: Government Discusses Japanese Financing for Patimban Port)

However, the total investment required to build the port is around IDR 40 trillion. The government has welcomed the offer of a loan from Japan to finance the project. Although the loan has a low interest of 0.01 percent, the government is committed to fully owning the port.

According Jonan, the most important thing is that the presence of the large port will stimulate export activities. Currently, there are large industrial zones in West Java. However, the existing ports cannot accommodate their needs, despite port expansions, such as at Tanjung Priok. "(Industries in) Jakarta and its surrounding areas will definitely go to Tanjung Priok. But those in Karawang, Cikarang, other areas in West Java, I think, will go to Patimban Port," he said.

(Read: Jonan Allows Private Sector to Build Ports)

Meanwhile, the Cabinet Secretary Pramono Agung admitted that the Patimban Port project has not been included in the Presidential Decree that regulates strategic project plans. However, before issuing a new presidential regulation, Widodo asked Jonan to renegotiate with various parties to make the project beneficial for Indonesia.

This includes negotiating loans from Japan to finance the construction of the port. According to Pramono, the President will make a state visit to Japan on 26-27 May. "Of course, while meeting with the Japanese leaders, [the President] will also discuss the matter," he said.