Home » Ports/Terminals » Poor port infrastructure a threat to Indonesia’s economy – APMT exec

A top official of APM Terminals (APMT) said Indonesia must immediately embark on an improvement program for its port and inland infrastructure if it intends to sustain its economic growth.

“Indonesia is not growing at its full potential, because economic growth in Indonesia faces infrastructure challenges,” said Michael Lund Hansen, APMT’s Asia-Pacific regional director of portfolio management, at the recent Indonesia International Conference-Focus on Indonesian Economy 2011.

Hansen said that five out of the six major Indonesian container ports, which together handle 90 percent of Indonesian container traffic, currently operate above capacity, reducing efficiency and adding to logistics costs, and risking the loss of international trade to lower-cost rivals.

Tanjung Priok and Tanjung Perak, Indonesia’s largest container ports, handled 4.7 and 3 million TEUs, respectively, in 2010, according to a July 22 press statement by APMT. The economy of Indonesia, with a population of 240 million, expanded by 6.1 percent in 2010, and is projected to grow to $842 billion in 2011.

An economic growth of 6.2 percent and 6.5 percent has been forecast by the International Monetary Fund for Indonesia in 2011 and 2012.

Indonesia ranked 30th in global exports with $119 billion and 31st in global imports with $92 billion during the global economic downturn of 2009, according to World Trade Organization Data. Indonesia’s current’s overall annual container throughput capacity is 11 million TEUs.

Based on projected growth rates, Hansen said Indonesia will require 6 million to 7 million TEUs of new container capacity by 2015, or an additional 15 million TEUs of container capacity by 2020. Since construction of facilities takes time, Hansen said the best time to get started is now.

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