Indonesia needs investment of US$47 billion to develop ports: official

A view of the Makassar New Port in South Sulawesi. (ANTARA FOTO/Abriawan Abhe/foc)

Source: ANTARA News Date: 13 August 2020

Indonesia needs US$47 billion in investment to develop ports across the country, a Transportation Ministry official said.

“Based on the master plan for national ports (RIPN), we need US$47 billion to develop ports from Sumatra to Papua,” director of port affairs at the Directorate General of Sea Transportation under the Transportation Ministry, Subagiyo, said at a webinar on dialog forum on maritime and fishery diplomacy on Thursday.

The development of ports in Sumatra will require an investment of US$12.9 billion, Java US$15.3 billion, Bali and Nusa Tenggara US$2.4 billion, Kalimantan US$4.6 billion, Sulawesi US$3.9 billion, and Papua US$7.9 billion.

Nearly 32 percent of the investment will be derived from the government budget and the remaining 68 percent from corporate bodies, Subagiyo said.

He said the development of ports has faced challenges in terms of investment and geographical standpoints. From the investment standpoint, limited state budget funds and lack of private participation have remained a problem.

From the geographical standpoint, the development of ports has been obstructed due to dependence on sea transportation, poor access due to higher number of remote areas, difference in characteristics between one area to another, and imbalance of growth centers.

“Due to the limited state budget funds, we have been ordered to tap as much investment as possible from third parties through several cooperation schemes,” Subagiyo said.

The schemes include government-corporate body cooperation (KPBU), concession cooperation, utilization cooperation, and rent.

Moving ahead, the government will encourage a greater chunk of private investment, including regional government’s investment through port corporate bodies.

For the 2021-2030 period, the total investment for the development of ports in the country is projected at US$22.5 billion, comprising US$6.3 billion (28 percent) from the government and US$16.2 billion (72 percent) from the private sector.