Indonesia’s state-owned port operator PT Pelabuhan Indonesia II (Pelindo II) has turned down the Ministry of Transportation’s request to cancel its contract with Hong Kong-based Hutchison Port Holdings (HPH) to manage Indonesia’s largest container terminal, the Jakarta International Container Terminal (JICT), until 2039.
Pelindo II president director Richard Joost Lino told local media people recently that, contrary to what the transportation ministry said earlier, there was no need for Pelindo II to seek the ministry’s blessing on the renewal of the contract because the operator owned the land where the terminal stands.
The Tanjung Priok Port authority had reportedly sent a letter to Pelindo II urging the latter to cancel the contract for noncompliance with government procedures.
Pelindo II and HPH have renewed their contract, which was set to expire in 2019, extending their cooperation for 20 more years, according to a report by The Jakarta Post.
The terms of the agreement stipulate an increase in Pelindo II’s stake in the terminal to 51 percent from 49 percent, an advance payment by the concessionaire of US$250 million to Pelindo, and a hike in the rent of HPH from $60 million to $120 million per year.
Lino said that with the new agreement, Pelindo II has the chance to change the terms and conditions of the cooperation in its favor.
The renewal of the contract before its expiration came about because Pelindo II needed more funds for the construction of the Kalibaru Port in North Jakarta that is seen to complement operations at the overutilized Tanjung Priok Port.
The company expects the first phase of the Kalibaru Port project to begin operations by 2017, adding 4.5 million TEUs of capacity to Tanjung Priok Port.
Photo: O.K. Photography
