LONDON: Private port operators have lauded the government’s recent decision to extend the time for them to prepare for a concession for operating bigger terminals, previously only open to state-owned port operators.
The Transportation Ministry expected to grant a concession to private port operators to run public terminals starting Feb. 29, but the ministry delayed the deadline to June pending preparations from the operators, which are currently only allowed to run special terminals and dedicated terminals, or public terminals on yearly permits.
“We are ready to sign the concession, but we need time to calculate the amount of time needed for the concession,” Indonesian Port Operators Association (ABUPI) chairman Aulia Febrial Fatwa said Monday.
Aulia was optimistic that private port operators would be able to complete preparations for the concession by June, adding that “the February deadline was a rush”.
Aulia said private operators saw benefits in running bigger terminals rather than special or dedicated ones. Calculations are needed to estimate the profit and investment for assets during the concession, as Ministerial Regulation No. 5/2015 stipulates that operators must return fixed assets or allow the ministry to buy movable assets by the end of the concession.
“For example, for land assets, they will keep increasing, but movable assets tend to depreciate. This has to be calculated, with a forecast for five to 15 years later,” he said. According to the association’s data, of 2,000 ports in the country, 900 are managed by special or dedicated port operators, leaving state port operator PT Pelabuhan Indonesia (Pelindo) to manage 112 ports, while the rest are operated by the Transportation Ministry. The ABUPI chairman said at least 18 port operators had been invited by the ministry and had expressed their readiness to sign the concession from early February.
Aulia, who is also commercial and business development director of PT Pelabuhan Tegar Indonesia, the operator of Marunda Center Terminal multipurpose port in West Java, said the company aimed to sign the concession this year. It plans to put to concession its first and second phases of development, in which it will upgrade its current 7.5 million ton yearly capacity to 12 to 14 million tons to prepare to become a public terminal.
Similar intentions were expressed by port operator PT Krakatau Bandar Samudra, which is a subsidiary of state run steelmaker PT Krakatau Steel Indonesia. “The application process for concession started in December,” said PT Krakatau Bandar Samudra commercial and development director David Rahadian. The firm saw greater business potential with the concession amid initial costs for asset revaluation, among other things, to prepare.
It aims to increase its capacity from 21 million tons to 40 to 45 million tons by 2025 to prepare for future public terminal operation. The business will partly rely on Krakatau Steel’s business development. However, the company is also still trying to complete audit documents for the Development Finance Comptroller (BPKP), as well as fulfil recommendations from the regional administration, David said.
The ministry can give a concession to a port operator through a bid or a direct assignment as long as the land is owned by the operator and no state budget is spent there. The duration of the concession is based on investment and the expected “reasonable profit,” according to the ministry’s regulation.
