PREFACE

In response to a request from the Government of the Republic of Indonesia (hereinafter referred to as “GOI” ), the Government of Japan decided to conduct a Study for the Greater Jakarta Metropolitan Ports in the Republic of Indonesia and entrusted the study to the Japan International Cooperation Agency (JICA).

JICA selected and dispatched a study team to Indonesia four times between March 2002 and October 2003, which was headed by Mr. Hidehiko Kuroda of the Oversea Coastal Area Development Institute of Japan (OCDI) and was comprised of OCDI and Pacific Consultants International, Ltd (PCI).

The team held discussions with the officials concerned of the GOI and conducted the field surveys at the study area. Upon returning to Japan, the team conducted further studies and prepared this final report.

I hope that this report will contribute to the promotion of the project and to the enhancement of friendly relationship between our two countries.

Finally, I wish to express my sincere appreciation to the officials concerned of GOI for their close cooperation extended to the team.

November 2003

Kazuhisa Matsuoka

Vice President

Japan International Cooperation Agency

LIST OF ABBREVIATIONS

A ADPEL Port Administrator Office AFTA ASEAN Free Trade Area AMDAL Environmental Impact Assessment ADB Asian Development Bank ASEAN Association of South East Asian Nations

B BAPEDAL Environmental Impact Management Agency BAPEDALDA Brunch Office of BAPEDAL BAPPEDA Provincial Development and Planning Board BAPPENAS National Development Planning Agency BCH Box/Crane/Hour B/C Benefit/Cost BKPM Investment Coordination Board BOD Biological Oxygen Demand BOR Berth Occupancy Ratio BOT Build-Operate-Transfer BPS Central Bureau of Statistics BPPN International Bank of Reconstruction and Development BT Berthing Time BUMN State Owned Company

C CFS Container Freight Station COD Chemical Oxygen Demand

D DGLC Directorate General of Land Communication DGH Directorate General of Highways DGSC Directorate General of Sea Communication DO Dissolved Oxygen DTV Daily Traffic Volume

E EDI Electric Data Interchange EIA Environmental Impact Assessment EIRR Economic Internal Rate of Return ET Effective Time (at Berth)

F FCL Full Container Load FTA Free Trade Area FIRR Financial Internal Rate of Return FDI Foreign Direct Investment

G GBHN Broad Outlines of the Nation’s Direction GDP Gross Domestic Product GOI Government of Indonesia GOJ Government of Japan GRDP Gross Regional Domestic Product GT Gross Tonnage

H

I IAPH International Association of Ports and Harbors IBRD International Bank of Reconstruction and Development IDB Islamic Development Bank IEE Initial Environmental Examination IMF International Monetary Fund IMTN Indonesia Medium Term Notes INSA Indonesian National Ship Owner Association IPC Indonesia Port Corporation

J Jabotabek Jakarta, Bogor, Tangerang and Bekasi area JBIC Japan Bank for International Cooperation JICA Japanese International Cooperation Agency JICT Jakarta International Container terminal JKT Jakarta JO Joint Operation JORR Jakarta Outer Ring Road JV Joint Venture

K KANPEL Port Administration Office (Non-commercial Port) KANWIL Provincial Office of a Central Ministry Keppres Presidential Decree Kimpraswil Ministry of Settlements and Regional Development KM Ministerial Decree KSO Kerjasma Operasi (Joint Operation)

L LCL Less then Container Load

M MENEG LH State Ministry for Environment MOC Ministry of Communication MOF Ministry of Finance MOSOE (MOSOC) Ministry of State-Owned Enterprises (Companies) M(O)SRD Ministry of Settlements and Regional Development

N NGOs Non Government Organizations NPS National Port System NPV Net Present Value

O OD Origin and Destination ODA Official Development Assistance

P PCC Pure Car Carrier PCU Passenger Car Unit PELINDO Indonesia Port Corporation PELNI Indonesian National Shipping Company PERSERO State-Owned Company PERUM ASDP State-Owned Inland Waterways & Ferry Company pH Hydrogen ion concentration PIANC Permanent International Association of Navigation Congress PJPⅡ The Second Long Term Development Plan PM10 Particular matter less than 10μm PP Government Regulation PPKB Permintaan Pelayanan Kapal dan Barang (The Demands of Ship and Good Services) PPSA One Roof Port Service Center PROPENAS National Development Policy PRT Port Related Traffic PSA PSA Company (changed from Port of Singapore Authority) PSP Private Sector Participation PT. Limited Company PT.RUKINDO Indonesia Dredging State Limited Company

R REPELITA National Five-year Development Plan REPELITADA Local Five-year Development Plan RKL Environmental Management Plan Rp. Rupiah RPL Environmental Monitoring Plan RTRW Spatial Use Plan RTG Rubber Tire mounted Gantry

S SIMOPPEL Port Operation Management Information System SOLAS International Convention on Safety of Life at Sea SOR Shed Occupancy Ratio SPM Suspended Particle Matter SS Suspended Solid

T TEU Twenty Foot Equivalent Unit THC Terminal Handling Charge TGH Ton/Gang/Hour TOR Term of Reference TTV Through Traffic Volume

U UNCTAD United Nations Conference on Trade and Development UU Law

W WB World Bank

Y YDT Yard Dwelling Time YOR Yard Occupancy Ratio

THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

–EXECUTIVE SUMMARY–

Executive Summary -Conclusion and Recommendation-

1. The study for “Development of Greater Jakarta Metropolitan Ports”, was implemented following the procedure hereunder:

Observation (Indonesia & World)

Identify Defficiency

(Examine and Formulate Effective Countermeasures)

Hardware Software Humanware Port Development Management & Operation Enhancement of Institutional Capacity

Development Strategy (Concept & Scenario)

Long-term Plan

Short-term Plan

Urgent Implementation Plan with its Appraisal

2. Conclusions and recommendations of the study are given below.

A. Identified Deficiencies

3. Tanjung Priok port now functions as the largest trading port in the Western Java area. However, its physical figure is almost the same as it was in the Dutch colonial era and the port productivity has been gradually deteriorated compared to major ASEAN ports. This will let the port’s function paralyzed in near future, and which will surely depress the investment climate especially for foreign investors. As a result, global companies will likely withdraw from this area and Indonesian products will lose competitiveness in the international market, especially in the ASEAN market.

4. The critical issue now facing the existing Tanjung Priok port are as follows, which are summarized in “being unable to meet the port users’ needs”:

Ø Lack of speedy and credible cargo transit through the port Ø Lack of safe and secure cargo handling Ø Lack of available port facilities and space to accommodate the cargo demand Ø Lack of fair and transparent dues and charge

5. The study team identified the causes of this unfavorable situation as follows:

Ø Limited capacities on ship navigation, land space and inland transport Ø Low efficiency/productivity of cargo handling due to capacity constraints and disorderly land use

(E-1) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

–EXECUTIVE SUMMARY–

Ø Institutional defectiveness in trade facilitation such as inefficient customs clearance, inefficient and inflexible terminal operating system, ineffective EDI system etc.

6. The study team strongly proposes DGSC and IPC-II to duly and continuously follow up and monitor these problems through the collection and observation of accurate data and information.

B. Hardware –Development of the Ports–

7. The study team examined cargo trends and the development potential of the ports, set the port development goal and strategy for ports in the Western Java area and formulated the master plan and the short-term development plan both for Tanjung Priok and Bojonegara. In addition, the study team selected the priority projects for urgent implementation and assessed the viability of the projects both for Tanjung Priok and Bojonegara.

B-1 Development Strategy

Development Targets of Jakarta Metropolitan Ports Ø To make the Greater Jakarta Metropolitan port function as a “Logistic Center” in ASEAN regions in order to maintain and enhance the competitiveness of Indonesian industry in the region by providing an attractive business /investment environment. Ø To make the Greater Jakarta Metropolitan port function as a Regional Hub Port” not only attracting international trunk lines but also linking them to domestic/inter-island lines

Development Focus

8. In order to achieve the above development targets, the following points should be focused on:

Ø Best use of the existing facilities Ø User friendliness of port facilities Ø Strategic port development and management Ø Environmental friendliness

Development Scenario

9. The proposed development scenario is as follow:

Ø To increase the port capacity of Tanjung Priok by its urgent rehabilitation up to 2008 with maximum use of the existing port facilities, which will increase the international container handling capacity of the port up to 3.6~3.8 million TEUs against the current capacity of around 3 million TEUs Ø To develop a new container handling port in Bojonegara by 2010 as a twin port of Tanjung Priok, considering the following points: – Spatial constraints for new development in the existing Tanjung Priok port and huge cost for new development outside Tanjung Priok port – Avoiding intensive concentration of cargo traffic especially large container trailers on the roads of the metropolitan area.

(E-2) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

–EXECUTIVE SUMMARY–

Necessary Capacity to be added Tanjung Priok Capacity 7,000 Demand of Export/Import Container

6,000 Bojonegara Operation 5,000 Completion of new container berths 4,000 3,000 2,000 Tanjung Priok Rehabilitation 1,000

Container Throughput ('000TEU) Throughput Container 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Demand and Capacity (International Container)

Functional Allotment

10. Basic functions of Tanjung Priok port and Bojonegara new port are set as follows, based on the development target and their potentials:

Ø Tanjung Priok • Principal international gate-way port supporting industrial development in Western Java area Ø Bojonegara • Complementary gate-way port of Tanjung Priok • Basic and strategic logistic infrastructure for regional development of Banten

11. Functional allotment among the Ports in the Western Java Area is summarized as follows:

Summary of Functional Allotment among the Ports in the Western Java Area Tanjung Bojonegara Ciwandan Merakmas Merak Cirebon Priok Export/Import Container +++ +++ + + - + Domestic Container +++ + - - - - Transshipment Container ++ ++ - - - - Conventional Cargo +++ +++ +++ + - +++ Passenger +++ - - - +++ - Ro-Ro Cargo ++ ++ - - +++ - Car Cargo +++ + - - - - +++: indicates principal ports ++: indicates ports which may become principal ports in future +: indicates ports which may handle a small portion of cargo in future -: indicates that cargo will not be handled

(E-3) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

–EXECUTIVE SUMMARY–

B-2 Master Plan and Short Term Development Plan

Development Concepts

12. Recognizing the strength and the weakness of each port, the study team sets the following development targets and project concepts.

Development Concepts Project Concepts Tanjung ü To increase the port ü Navigational Condition Improvement Priok capacity/productivity (in terms of Capacity & Safety) ü To ensure safety and security of the ü Automobile Terminal Development port ü Re-organizing Land-use of the Existing ü To meet the port users' needs and to Port provide appropriate services ü Development of new port area to ü To consider environment-friendly accommodate functional relocation development from the existing port as well as future demand ü Road Improvement/development in/around the port ü Ecological Area Development Bojonegara ü To establish high grade, world standard ü Development of new Container international container terminal Terminal with Related Port Facilities ü To attract cargo by providing ü To provide good access to/from the competitive services port ü To consider environment-friendly ü To enhance regional industrial development development and ensure sufficient coordination with new port development ü To minimize the impact of port development on the surrounding environment

Project Components

13. The following project components are recommended to be implemented toward 2025, while projects indicated by bold type are proposed to be developed in the short-term toward 2012.

(E-4)

THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

Tanjung Priok Project Concepts Contents Remarks Navigational condition - Widening main channel (300m) & turning basin Short-term improvement (to increase - Widening the channel & basin to the Nusantara area Short-term the capacity together with together with military relocation maintaining navigational - Opening the east channel to accommodate larger safety) vessels Automobile terminal development (1 berth in the short term, 2 berth in the long term) Short-term Re-organizing land-use of the existing port Streamlined cargo - Inter-island container handling (Pier III reorganization Short-term handling zone and MTI expansion) - Bulk cargo handling (CPO, sand, cement etc.) Short-term - Passenger terminal relocation Short-term - Pertamina berths relocation together with consolidation of international container terminal Providing suitable and - Yard Development Short-term sufficient space for - Reclamation of a part of Nusantara basin Short-term better port - Consolidation of ship building yard management - Relocation of military base Short-term Land-use - Re-development around the Tanjung Priok railway Short-term re-development in the station (Urban side) urban area adjacent to - Re-development of the residential area to the south of Short-term the port JICT container terminal (Urban side) Development of new port area Ancol Development - New Passenger Terminal Short-term - Multi Purpose Terminal Short-term - Access road Short-term Kalibaru Off-shore - Consolidation of ship building yard Development - Development of special cargo handling zone - Access road - Development of Kalibaru new port Environmental - Improvement of water change through the port Short-term Improvement entrance by re-alignment of breakwater - Ecological waterfront development with mangrove planting - Development of amenity facilities such as observation tower Road development - Port Inner Road Improvement Short-term /improvement in/around - Eastern Port Access Highway to link with JORR Short-term the existing port (Road sector) - Improvement of the existing urban road including Short-term western port access road and access road to/from JIUT (Road sector)

(E-7) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

Bojonegara Project Concepts Contents Remarks Basic Infrastructure - Breakwater, channel, basin and necessary port service Short-term Development facilities Development of new Container Terminal Short-term (2 berths (600m) in the short term, 8 berths (2,400m) in the long term) Unitized and other cargo - Multi purpose terminal Short-term handling facilities - General cargo berth development - Ro-Ro terminal Short-term - Special cargo handling To provide good access - High-standard access road connecting the existing Short-term to/from the port Jakarta-Merak toll road (Road sector) - Railway service connected with an inland container distribution center/terminal (In addition to the above access road, JORR (Jakarta Outer Ring Road) is indispensable for the new port operation.)

B-3 Urgent Plan

14. Among the projects in the master plan and the short-term development plan, the following projects are proposed to be implemented urgently. The study team assessed viability of the projects from economic, financial and environmental view points.

Urgent Rehabilitation Plan of Tanjung Priok Ø Widening the Main Channel and expanding turning basin (should be partly realized by 2006) Ø Automobile Terminal Development (should be realized by 2006) Ø Inter-island Container Handling Improvement in Pier-III (Step by step redevelopment together with Ancol development; should be partly realized by 2008) Ø Ancol Development including New Passenger Terminal, Multi Purpose Terminal and Access Road (Initial development should be realized by 2010) Ø Port Inner Road Improvement (should be realized by 2006) Ø Eastern Port Access Highway Development Linking with JORR - This project is urgent but should be implemented by Kimpraswil because road itself is outside of the port and will be a part of the urban road network.) (Feasibility) Ø Economic evaluation: EIRR (Port project, excluding Ancol) = 33.0% EIRR (Port project, including Ancol) = 18.2% EIRR (Access road project) = 25.1% Ø Financial evaluation: FIRR (Public sector, excluding Ancol)= 10.7% FIRR (Public sector, including Ancol) = 4.3% FIRR (Automobile terminal operator) = 16.0% Ø Not serious impacts on environment, however, it is desirable to be implemented in accordance with a proper environmental management plan and a monitoring plan.

(E-8) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

-14m Urgent Rehabilitation Project 300m (for Feasibility Study)

Breakwater 100 200 500 1,000m Demolition

m 20 11 Channel, Basin Dredging R Car terminal Passenger terminal

Multi Pupose Terminal 783m 590m 962m Green Buffer Zone

4 120m Port Related Zone 4 0 -10m m Re-development / Reclamation (Port Side) m 0 560m 3 0m 400m 1 2 -14m 2 -12m -14m

KOMPLEK 2L(400m) 112m 400m TNI-AL -10~11m 2 00m -10m KOMPLEK 1 AIRUD 1 2 -10~11m m 250m m

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Bojonegara Ø Container Terminal Development (should be completed by 2010) Ø Multi Purpose Terminal Development (should be completed by 2008) Ø Breakwater, Channel and Basin Development (should be developed together with terminal development; breakwater will be necessary for container terminal operation.) Ø Port Access Road Development, implemented by Kimpraswil as a national road status (should be developed by 2008 when multi purpose terminal will be into operation.) (Feasibility) Ø Economic evaluation: EIRR=17.9% Ø Financial evaluation: FIRR (Public sector)= 6.0% FIRR (Container terminal operator)= 18.7% Ø Not serious impacts on environment, however, it is desirable to be implemented in accordance with a proper environmental management plan and a monitoring plan.

(E-9) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

Urgent Development Project (for Feasibility Study) 300m

3

4

0

m

(-5m) m 0 (-8m) 5 10 O300m 80 0 Container Terminal 50 0 m m (-10m) (-12m) Multi purpose terminal (GC, CT etc.) 22 0m 200 (-12m) m Government zone 300 300m O560m m Port related zone (-12m)

0m 600m GC cargo Hanlind zone 5 4

Channel, Basin Dredging

Breakwater

Road

100 200 500 1,000m

B-4 Recommendations

15. Based on the above results and conclusions, the study team recommends that the following matters be followed up by DGSC and IPC-II.

To implement the proposed urgent project at the earliest possible time

16. DGSC and IPC-II should make their best efforts to implement and realize the proposed urgent projects for Tanjung Priok rehabilitation as well as for Bojonegara new port development by the combination of soft loan and private fund.

To improve the port access road condition

17. Road sector, i.e. Kimpraswil and/or Jasa Marga should improve the condition of port access roads in good cooperation with port sector, i.e. DGSC and IPC-II. JORR completion is also indispensable for Bojonegara development because the port hinterland will be dependent on the toll road network including JORR.

To formalize master plans as well as land-use plans by government regulation

18. DGSC and IPC-II should follow up the study results and stipulate master plans as well as land-use plans of the Jakarta Metropolitan port by government regulation at the earliest possible time to avoid disorderly development of the port and hinterland.

To take prompt actions for re-organizing the existing port area

19. DGSC and IPC-II should take a prompt action for re-organizing the existing port area, especially on the following matters:

Ø Military relocation Ø Keeping inactivated and/or unutilized land in the port area under the port administration control to prevent disorderly and unchecked development

(E-10) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

To follow up environmental matters

20. DGSC and IPC-II should duly consider environmental affairs in carrying out port activities and/or new development. In particular, the following issues should be addressed:

Ø Countermeasures to deal with drainage and waste material from the city to the port Ø Improvement of water quality in/around the port by relocation of breakwater making use of ecological waterfront such as mangrove plantation etc.

C. Software –Management and Operation of the Ports–

21. For better management and operation of the port, the following measures should be taken by DGSC in collaboration with IPC-II:

C-1 Status of Jakarta Metropolitan Port

22. Tanjung Priok and Bojonegara, important infrastructure supporting industrial activities in Western Java area, should be given the status of International Hub Port, and should be properly managed as twin ports of Jakarta Metropolitan port.

C-2 Terminal Operation

To establish an appropriate operation scheme for the automobile terminal

23. A full fledged loading/unloading operation of automobile products requires special skills. Therefore, IPC-II should establish an appropriate operation scheme for the automobile terminal immediately. The study team recommends the following:

Ø Terminal operation itself should be left to the expertise of automobile transport/handling companies Ø Reasonable handling tariff should be set after examining the examples of other terminal as well as taking the port users’ opinions into consideration (Based on the financial analysis, the study team proposes around US$13/unit.) Ø The terminal should be operated under common use principle for various automotive manufacturing companies

To improve operational performance of terminals Ø To monitor operational performance of terminals properly through the following actions: • Clearer performance indicators should be introduced to supervise the performance of operators • Performance target should be incorporated in the concession agreement or management agreement Ø Consolidation of the operators of conventional terminal considering the following points: (From the theoretical point of view, excessive numbers of operator decreases the scale merit in terms of number of available berths for common carriers and this situation causes unnecessary waiting for carriers.) • The existing operators of conventional terminal should be grouped into smaller numbers to operate reasonable number of berths jointly to pursue the scale merit.

(E-11) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

It is suitable that 5 to 10 berths are available for each terminal operator centering on terminal operators and/or stevedoring with good performance. • Selection of terminal operators should be carried out by open-tender. Ø To reduce berthing time by changing berthing fee system from day charge to time charge Ø To establish an effective land traffic management system in/around the port as well as improvement of roads in/around the port. Ø To reduce direct delivery ratio to/from the ports with appropriate regulations. To promote the use of yard/transit shed with some incentive is also necessary. Ø To properly maintain port facilities and equipment

DERMAGA EX.

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TO-E GD.302 GD.203 J I C T GD.104 TO-N INTIBOGA SEJAHTERA INTIBOGA MAJUAN

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To create appropriate concession scheme for Bojonegara container terminal development

24. In introducing the concession scheme to Bojonegara container terminal development, the following points should be taken into consideration:

Ø Open tender system to secure fairness and transparency should be adopted. Ø Assessment of business viability from view points of both IPCII/Government and concessionaire through risk analysis and identifying proper risk sharing scheme between IPCII/Government and concessionaire should be conducted as early as possible after the feasibility study. Ø Performance target should be incorporated in the concession agreement and management agreement. Corporate articles together with clear accounting system should be more clearly defined when a joint stock company is a concessionaire candidate. DGSC should play a role of regulator.

(E-12) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

C-3 Port Management

To provide reasonable and competitive tariff/charge and maintain transparency of price setting Ø Leadership of DGSC should re-examine the existing tariff/charge system comparing with other cases in neighboring ports. Ø Based on the above examination, DGSC should formulate the revised concept/system of tariff and port charge and open it to the public. Ø IPC-II should show the maximum level of tariff/charge and give terminal operators and/or stevedoring companies a free hand to set actual tariff/charge within the maximum. (Based on the financial analysis, handling charge at the container terminal in Bojonegara could be reduced to 60~70% of its current level. The team also proposes a rate of about US$13/unit for the automobile terminal in Tanjung Priok.)

To achieve efficient customs clearance Ø Three customs offices in the port area should be integrated into one customs office together in order to achieve a single window procedure

To improve EDI system

25. EDI system expedites documentation procedures in ports including customs clearance. EDI system has already been established in Tanjung Priok, however, it is not fully utilized and optimized yet. The study team recommends the following actions:

Ø To integrate the existing EDI system with close coordination and cooperation of customs office Ø IPC-II should utilize an EDI service provider as a means of getting information on port activities to analyze berth performance

To enhance port security Ø To set up a security committee composed of related organizations in order to prevent such incident as pilferage in the port. The committee will meet regularly to discuss problems reported from related offices as well as port users, measures and recommendations to improve the situation. Ø To introduce sufficient hardware for port security such as fence and ITV which can be monitored from a central office, together with a constant surveillance system in actual site.

To control land-use of the port area Ø Keeping inactivated and/or unutilized land in the port area under the port administration control to prevent disorderly and unchecked development

To activate promotion of the port Ø IPC-II should hold meetings with related parties such as shipping companies, shippers and consignees to exchange necessary information and viewpoints, to obtain precise information on the shipping market, and to grasp the needs of users. Ø To clarify the sales points of the port and to reinforce port sales promotion activity to potential users

(E-13) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

Ø To develop the hinterland and attract more cargo, especially for Bojonegara new port Ø It is important to coordinate port development with regional development, especially industrial location. Special economic zone should be developed adjacent to the ports, especially for Bojonegara new port

Banten Province: Jakarta DKI & West Java LAMPUNGAround 20% Province: Around 80% JAKARTA DKI

CIREGON 12.2% SERANG Serang 16.2% 3.0% 7.9% TANGERANG 34.8% BEKASI Karawang Tangerang Bekasi PANDEGLANG KARAWANG INDRAMAYU RANGKASBITUNG Subang DEPOK Indramayu 3.0% BANTEN Bogor 8.5% PURWAKARTA SUBANG BOGOR Purwakarta Pandeglang Lebak 3.0%CIREBON Cirebon MAJALENGKA CIANJUR 9.0% SUMEDANG Majalengka Sumedang SUKABUMI BANDUNG Bandung KUNINGAN Kuningan Jakarta DKI West Java South JKT Regency City WEST JAVA East JKT Bogor Bogor Sukabumi Central JKT Sukabumi Sukabumi GARUT West JKT Cianjur Bandung North JKT Bandung Cirebon Cianjur Garut Bekasi CIAMIS CENTRAL JAVA Banten Tasikmalaya Depok Garut TASIKMALAYA Regency Ciamis Pandeglang Kuningan Lebak Cirebon Tasikmalaya Tangerang Majalengka Ciamis Serang Sumedang City Indramayu Other Area 2.5% Tangerang Subang Ciregon Purwakarta Karawang Bekasi Current Container Cargo Distribution

South JKT Other Area 1% 2% Bogor Other Area Bogor 9% West JKT Eas t of W J 2% 8% Eas t of WJ 8% 9% 9% South JKT Bekas i 1% Tangerang West JKT 12% 25% 8% Bekas i 20% 38% Tangerang 25% Serang 8% 12% North JKT Serang North JKT 7% Eas t JKT 10% 7% Eas t JKT Central JKT 16% Central JKT 15% 3% 3% Bojonegara Hinterland (Current Situation and Future)

C-4. Finance

To optimize soft loans to realize substantial port development of the Greater Jakarta Metropolitan ports

26. To realize the development plans of the Greater Jakarta Metropolitan ports, IPC2 will have to prepare sufficient funds. As the financial situation of IPC-2 will have been tough for the time being, the proposed urgent projects both for Tanjung Priok port and Bojonegera new port should be implemented optimizing soft loans which have advantages of low interest as well as long grace period.

(E-14) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

To formulate proper financial scheme for development, operation and maintenance of the ports

27. In order to implement port development projects smoothly, it is crucial to formulate proper financial scheme for development, operation and maintenance of the ports, and the Ministerial Decree on National Port System should be amended incorporating financial aspects of port investment and operation. The study team proposes the following framework for the proposed urgent projects of Tanjung Priok and Bojonegara:

Development Management/ Remarks Operation Breakwater, Access CG CG／IPC-2*1 Channel Inner Channel and Basin IPC-2 IPC-2 Terminal (Profitable) Container terminal etc. Infrastructure IPC-2／CG*2 Quay wall, front basin etc. Superstructure Private Private Handling equipment, pavement etc. Terminal (Less profitable) IPC-2／CG*2 Private／IPC-2 Conventional terminal etc. Port Inner Road IPC-2 IPC-2 Access Road Road Sector*3 Road Sector*3 *1： When an integrated management by IPC-2 needed *2： In case that project risk will be considered to be high, it should be examined whether the CG will bear the cost. *3： CG or Local Government

Development Bodies

Central Government Access Channel Breakwater IPC

Breakwater Infrastructure: IPC Inner Channel Superstructure: Private

IPC, but development cost can Turning Turning Turning Basin Basin be shared by private sectors Container Basin Terminal Conventional Conventional Terminal Terminal

Port Inner Road

Road Sector Access Road

28. It is also essential that the financial burden of IPC-2 should be lowered to keep good port management and operation, and in this connection, private funds should be utilized properly and effectively. In case that beneficiaries by the port development are able to be specified in such case as development of turning basin in front of specific terminal, they should pay for a part of the project cost in accordance with the extent of their benefit. And when the project risk is considered to be relatively low, e.g. in case of expanding container terminal, there will be a possibility to introduce complete BOT scheme for infrastructure development. For access road development, local government as well as related public sector should be involved.

(E-15) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

D. Humanware –Enhancement of Institutional Capacity–

D-1 Establishment of effective training system Ø To provide good training system for port workers/gangs Ø To activate port related organization by introducing such system as Quality Control (QC) circle Ø To enhance the function of the Port Training Center (PTC)

D-2 Setting up the information unit together with the development of effective database system Ø To develop appropriate statistical system and to establish the integrated database system Ø To enhance the capability of planning as well as port performance evaluation utilizing the above database system

29. To achieve afore-mentioned improvements of soft-ware issues, it is recommended that “Administrative & Management Skill Enhancement Program” should be implemented by DGSC and IPC2 with the support of external experts. The said program can provide various tools that are necessary to resolve the wide-ranging problems.

30. DGSC and IPCs should commence the following actions with the assistance of the proposed Administrative & Management (A & M) Skill Enhancement program.

Ø To modify port statistics system Ø To conduct training for the enhancement of the capability of assessing/evaluating performance of the private sector Ø To modify the institutional framework for responding “Decentralization” and “Privatization”

31. Major activities of the program are as follows:

Ø Establishment of “Port Affairs Information Unit (provisional name)” Ø Recipient of external expert team for technology transfer Ø Inspection/examination of detailed administrative system Ø Training of staff of the Port Affairs Information Unit Ø Establishment of the “Port Affairs Information System (provisional name)” Ø Provision of guidelines regarding port administrative procedures Ø Formulation of training program

32. Outcome of the program are as follows

Ø Establishment of a new organization that is able to control and analyze all port affairs information, Ø Establishment of a new information system that enables comprehensive evaluation of port activities due to its standardized format and integrated contents Ø Fostering of administrative officials who have the skill to evaluate/asses basic

(E-16) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-17 INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION

data/information Ø Establishment of a technology transfer scheme from the central government (a new unit) into IPCs, local governments, etc.

(E-17) THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

Summary Report

Contents

EXECUTIVE SUMMARY -CONCLUSION AND RECOMMENDATION- ...... 1 A. IDENTIFIED DEFICIENCIES ...... 1 B. HARDWARE –DEVELOPMENT OF THE PORTS– ...... 2 C. SOFTWARE –MANAGEMENT AND OPERATION OF THE PORTS– ...... 11 D. HUMANWARE –ENHANCEMENT OF INSTITUTIONAL CAPACITY– ...... 16 CHAPTER-1. OUTLINE OF THE STUDY ...... 1

1-A. BACKGROUND OF THE STUDY ...... 1 1-B. PURPOSE OF THE STUDY...... 2 1-C. STUDY AREA ...... 2 1-D. STUDY SCHEDULE...... 3 1-E. IMPLEMENTATION ORGANIZATION ...... 3 1-F. COMPOSITION OF THE REPORTS ...... 4 CHAPTER-2. OVERVIEW OF SOCIO-ECONOMY IN INDONESIA AND THE STUDY AREA ...... 5

2-A. GEOGRAPHICAL FEATURE...... 5 2-B. ADMINISTRATION SYSTEM ...... 6 2-C. ECONOMIC PERFORMANCE IN THE PAST...... 6 2-D. SOCIO-ECONOMIC REFORMS OF THE GOVERNMENT ...... 7 2-E. NATIONAL/REGIONAL DEVELOPMENT PLAN...... 9 2-F. ENVIRONMENTAL CONSERVATION POLICY...... 10 CHAPTER-3. OVERVIEW OF TRANSPORT SECTORS IN INDONESIA AND THE STUDY AREA ...... 13

3-A. LAND TRANSPORT...... 13 3-B. MARITIME TRANSPORT ...... 14 3-C. AIR TRANSPORT ...... 14 3-D. INVESTMENT IN TRANSPORT SECTOR ...... 14 3-E. TRANSPORT POLICY AND PLANNING...... 16 CHAPTER-4. MARITIME TRANSPORT SITUATION IN INDONESIA ...... 17

4-A. BASIC POLICY FOR MARITIME TRANSPORT IN INDONESIA...... 17 4-B. KEY LAWS AND REGULATION RELATED TO MARITIME TRANSPORT ...... 17 4-C. SITUATION OF MAJOR CONTAINER HANDLING PORTS IN INDONESIA...... 18 4-C-1 General Description ...... 18 4-C-2 Port Facilities ...... 19 4-C-3 Port Activity...... 19 4-C-4 Container Terminal Operation...... 21 CHAPTER-5. INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA.24

5-A. INTERNATIONAL CONTAINER SHIPPING NETWORK AROUND INDONESIA...... 24 5-B. MAJOR CONTAINER HANDLING PORTS AROUND INDONESIA ...... 26 5-B-1 Port Status in terms of Liners’ Calling Ratio...... 26 5-B-2 Port Activity (Container) ...... 27 5-C. PERFORMANCE OF MEGA CONTAINER TERMINAL OPERATOR IN THE ASIA REGION .... 28 CHAPTER-6. CURRENT SITUATION OF PORTS IN THE STUDY AREA...... 30

i THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

6-A. OVERVIEW OF PORT ADMINISTRATION SYSTEM IN THE STUDY AREA ...... 30 6-B. PORT MANAGEMENT IN THE STUDY AREA ...... 31 6-B-1 Organization of IPC2 ...... 31 6-B-2 Affiliated Companies of IPC2...... 31 6-B-3 Port Management System ...... 32 6-B-4 Port Dues & Tariff for Container Cargo ...... 33 6-C. PORT ACTIVITIES IN THE PAST...... 36 6-C-1 Calling Vessels ...... 36 6-C-2 Cargo Throughput...... 36 6-C-3 Passenger Movement...... 38 6-D. DETAIL SITUATION OF TANJUNG PRIOK PORT ...... 38 6-D-1 Port Facilities & Equipment ...... 38 6-D-2 Navigational Situation in the Port ...... 45 6-D-3 Port Traffic...... 47 6-D-4 Shipping Lines and Stevedoring Companies ...... 48 6-D-5 Terminal Operation...... 49 6-D-6 Hinterland and Origin-Destination of Container Cargo ...... 61 6-D-7 Land Transport to/from the port ...... 63 6-D-8 On-going and/or Future Development Projects...... 65 6-E. SITUATION OF OTHER PORTS...... 66 6-F. BOJONEGARA DEVELOPMENT ...... 68 6-G. CRITICAL REVIEW OF PAST STUDIES AND PLANS OF THE MAJOR PORTS...... 69 CHAPTER-7. TRENDS AND PROSPECTS OF PORT DEMAND...... 71

7-A. SOCIO-ECONOMIC FRAMEWORK...... 71 7-B. FORECAST OF CARGO DEMAND BY PACKING TYPE ...... 74 7-C. FORECAST OF CARGO DEMAND BY COMMODITIES IN TANJUNG PRIOK ...... 79 CHAPTER-8. CAPACITY AND DEVELOPMENT POTENTIAL OF THE PORTS...... 81

8-A. PORT CAPACITY ...... 81 8-A-1 Off Shore Capacity (Navigational Capacity) of Tanjung Priok...... 81 8-A-2 On-shore Capacity (Quay Side & Yard Side Capacity) of Tanjung Priok...... 81 8-B. LAND TRANSPORT CAPACITY OF TANJUNG PRIOK ...... 85 8-B-1 Daily Traffic Volume (DTV) from 3 Directions around the Port ...... 85 8-B-2 Port Related Traffic (PRT) and Through Traffic Volume (TTV)...... 87 8-B-3 Forecast of the Daily Traffic Volume (DTV) around the port...... 88 8-B-4 Lane Capacity of the Road ...... 90 8-B-5 Railway Access ...... 91 8-C. ENVIRONMENTAL FACTORS...... 92 8-D. NATURAL CONDITION ...... 92 8-E. HINTERLAND SITUATION ...... 94 CHAPTER-9. PORT DEVELOPMENT STRATEGY...... 98

9-A. EXISTING PROBLEMS ...... 98 9-B. COMPARISON WITH OTHER ASIAN PORTS ...... 99 9-C. DEVELOPMENT TARGETS AND FOCUS...... 102 9-D. DEVELOPMENT SCENARIO ...... 103 9-E. FUNCTIONAL ALLOTMENT ...... 104 9-E-1 Principle of Functional Allotment of Bojonegara...... 104 9-E-2 International Container ...... 105 9-E-3 Inter-island Container and General & Bag Cargo...... 107 9-E-4 Automobile Products...... 107 9-E-5 Summary ...... 109 9-F. PROPOSED DEVELOPMENT SCENARIO ...... 110 CHAPTER-10. MASTER PLAN FOR TANJUNG PRIOK AND BOJONEGARA NEW PORT IN 2025 ...... 112

ii THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

10-A. DEVELOPMENT CONCEPT OF THE PORTS...... 112 10-B. PLANNING CONDITION...... 114 10-B-1 Cargo Demand...... 114 10-B-2 Target Ship Size ...... 114 10-B-3 Planning Standard for Channel and Basin...... 119 10-C. PROJECT COMPONENTS (MAJOR PROJECTS) ...... 119 10-C-1 Navigational Condition Improvement...... 119 10-C-2 Automobile Terminal Development ...... 120 10-C-3 Re-organizing Land-use of the Existing Port...... 123 10-C-4 New Port Area Development...... 128 10-C-5 Port Access Improvement ...... 131 10-C-6 Environmental Improvement...... 132 10-C-7 Summary of Project Components...... 133 10-C-8 Layout of Port Facilities and Land-use Plan ...... 134 10-D. PROJECT COMPONENTS FOR BOJONEGARA...... 137 10-D-1 Container Terminal Development...... 137 10-D-2 Multi Purpose Terminal and General Cargo Berth Development ...... 137 10-D-3 Breakwater, Channel and Basin ...... 137 10-D-4 Port Access Development...... 139 10-D-5 Summary of Project Components...... 139 10-D-6 Layout of Port Facilities ...... 140 10-E. PRELIMINARY IMPLEMENTATION SCHEDULE...... 142 10-F. PRELIMINARY ENGINEERING DESIGN AND COST ESTIMATE...... 142 10-F-1 Preliminary Design Concept of Port Facilities...... 142 10-F-2 Calmness of Channel and Basin of Tanjung Priok and Bojonegara Port..... 145 10-F-3 Estimate of Project Cost ...... 146 10-G. PRELIMINARY ECONOMIC ANALYSIS ...... 148 10-H. INITIAL ENVIRONMENTAL EVALUATION (IEE)...... 149 10-H-1 IEE for the Master Plan of Tanjung Priok ...... 149 10-H-2 IEE for the Master Plan of Bojonegara ...... 151 CHAPTER-11. ROAD NETWORK IMPROVEMENT PROJECTS/PROGRAMS ...... 153

11-A. ACCESS ROAD FOR TANJUNG PRIOK ...... 153 11-A-1 Forecast of Future Traffic...... 153 11-A-2 Proposed Improvement of Access Road to Tanjung Priok ...... 155 11-A-3 Development Concept of Jakarta Outer Ring Road and Access Road to the Port ...... 155 11-A-4 Development Plan of JORR Northern Extension for Access Road ...... 157 11-B. PROPOSED RE-DEVELOPMENT PLAN OF THE TANJUNG PRIOK BUS TERMINAL..... 162 11-B-1 Background and purpose...... 162 11-B-2 Existing conditions, issues and improvement policies of the bus terminal . 162 11-B-3 Bus terminal improvement plan ...... 163 11-C. ACCESS ROAD FOR BOJONEGARA NEW PORT...... 167 11-C-1 Forecast of Future Traffic...... 167 11-C-2 Development Plan for Access Road ...... 167 CHAPTER-12. SHORT-TERM AND PHASED DEVELOPMENT PLAN ...... 171

12-A. IDENTIFICATION OF SHORT-TERM DEVELOPMENT PROJECTS TOWARD 2012...... 171 12-A-1 Tanjung Priok...... 171 12-A-2 Bojonegara...... 172 12-B. SHORT-TERM DEVELOPMENT PLAN TOWARD 2012...... 172 12-C. PHASED DEVELOPMENT PLAN ...... 175 12-D. SELECTION OF PRIORITY PROJECTS FOR FEASIBILITY STUDY...... 186 CHAPTER-13. MANAGERIAL AND OPERATIONAL IMPROVEMENT ...... 187

13-A. ADMINISTRATIVE STATUS OF THE FOCUS PORTS ...... 187 13-B. MANAGEMENT AND OPERATION SCHEME FOR INTERNATIONAL CONTAINER

iii THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

TERMINAL ...... 187 13-C. MANAGERIAL AND OPERATIONAL IMPROVEMENT FOR THE CONVENTIONAL TERMINAL IN TANJUNG PRIOK ...... 191 13-D. SCHEME OF PORT DEVELOPMENT, OPERATION AND MANAGEMENT...... 192 13-E. PRIVATE PARTICIPATION FOR MANAGEMENT AND OPERATION OF THE PORT...... 194 13-F. INSTITUTIONAL IMPROVEMENT ...... 195 13-G. PORT WORKING AREA AND PORT INTEREST AREA ...... 197 CHAPTER-14. FEASIBILITY STUDY ON URGENT REHABILITATION PLAN OF TANJUNG PRIOK ...... 198

14-A. CONCEPT AND COMPONENTS OF URGENT REHABILITATION PLAN OF TANJUNG PRIOK ...... 198 14-A-1 Concept of Urgent Rehabilitation Plan of Tanjung Priok ...... 198 14-A-2 Components of Urgent Rehabilitation Project of Tanjung Priok Port...... 199 14-B. REQUIREMENT & LAYOUT OF THE PORT FACILITIES ...... 202 14-B-1 Navigational Condition Improvement...... 202 14-B-2 Automobile Terminal ...... 202 14-B-3 Inter-island Container Terminal in Pier-III...... 203 14-B-4 Ancol Development ...... 204 14-B-5 Port Inner Road Improvement ...... 206 14-C. ENGINEERING DESIGN AND COST ESTIMATE...... 211 14-C-1 Berth Structures ...... 211 14-C-2 Design of Reconstruction of Breakwater ...... 212 14-C-3 Navigation Channel Widening and Deepening...... 213 14-C-4 Port inner road works ...... 215 14-C-5 Project Cost Estimate ...... 215 14-D. PROJECT IMPLEMENTATION SCHEDULE ...... 216 14-E. MANAGEMENT AND OPERATION OF PORT FACILITIES...... 220 14-E-1 Development and Operation Scheme ...... 220 14-E-2 Cost Allocation and Implementation Scheme ...... 222 14-F. ECONOMIC ANALYSIS ...... 222 14-G. FINANCIAL ANALYSIS...... 224 14-G-1 Financial Analysis for Automobile terminal ...... 224 14-G-2 Financial Analysis for Automobile Terminal (Alternative Case) ...... 228 14-G-3 Financial Analysis of Tanjung Priok Urgent Project (Whole Project excluding Ancol) ...... 229 14-G-4 Financial Analysis of Tanjung Priok Urgent Project (Whole Project including Ancol) ...... 233 14-H. ENVIRONMENTAL IMPACT ASSESSMENT ...... 237 CHAPTER-15. FEASIBILITY STUDY ON URGENT DEVELOPMENT PLAN OF BOJONEGARA ...... 242

15-A. CONCEPT AND COMPONENTS OF URGENT REHABILITATION PLAN OF BOJONEGARA NEW PORT ...... 242 15-A-1 Concept of Urgent Development Plan of Bojonegara New Port...... 242 15-A-2 Components of Urgent Development Plan of Bojonegara New Port ...... 242 15-B. REQUIREMENT & LAYOUT OF THE PORT FACILITIES ...... 245 15-C. ENGINEERING DESIGN AND COST ESTIMATE...... 248 15-C-1 Berth Structures of Container Terminal Berth, and Multi purpose Berth.. 248 15-C-2 Breakwater construction ...... 249 15-C-3 Navigation Channel Widening and Deepening...... 250 15-C-4 Diversion Canal...... 251 15-C-5 Project Cost Estimate ...... 252 15-D. PROJECT IMPLEMENTATION SCHEDULE ...... 253 15-E. MANAGEMENT AND OPERATION OF PORT FACILITIES...... 255 15-E-1 Port Administration ...... 255 15-F. ECONOMIC ANALYSIS ...... 257

iv THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

15-G. FINANCIAL ANALYSIS...... 258 15-G-1 Base Case...... 258 15-G-2 Optional Case ...... 261 15-H. ENVIRONMENTAL IMPACT ASSESSMENT ...... 263 CHAPTER-16. FINANCIAL VIABILITY ASSESSMENT OF PORT RELATED ORGANIZATIONS ...... 268

16-A. FINANCIAL STRUCTURE OF IPC2 AND TANJUNG PRIOK PORT...... 268 16-B. PORT RELATED EXPENDITURE AND REVENUE IN THE GOVERNMENT BUDGET ..... 273 16-C. FUND RAISING FOR INVESTMENT OF METROPOLITAN PORT...... 275 CHAPTER-17. INSTITUTIONAL VIABILITY OF PORT RELATED ORGANIZATION ...... 276

17-A. ANALYSIS ON THE FACTORS IMPEDING TRADE FACILITATION ...... 276 17-B. ANALYSIS ON THE CURRENT PORT ADMINISTRATION AND MANAGEMENT...... 278 17-B-1 Planning Procedure...... 279 17-B-2 Investment procedure together with Budget Planning Procedure...... 279 17-B-3 Approval/Permission, Supervision/Monitoring Procedure ...... 281 17-B-4 External/Internal Audit Procedure...... 284 17-C. ANALYSIS ON THE CURRENT PORT RELATED STATISTICS TOGETHER WITH PROCESSING SYSTEM OF DATA AND INFORMATION...... 285 17-D. ENHANCEMENT OF INSTITUTIONAL CAPACITY ...... 287 17-D-1 Action Program for Improvement of Import/Export Logistics in Jakarta Metropolitan Port...... 287 17-D-2 Recommendation on Data Collecting and Processing System ...... 289 17-D-3 Concept for “Port Affairs Information Unit” Established in DGSC and/or IPC ...... 291 17-D-4 Proposed Program for Administration & Management Skill Enhancement 294

v THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

Table and Figure Contents

TABLE 2-A-1 AREA & POPULATION...... 5 TABLE 2-E-1 MACRO-ECONOMIC FRAMEWORK ...... 10 TABLE 2-F-1 CRITERIA FOR AMDAL REQUIREMENT (PORT DEVELOPMENT PROJECT)...... 11 TABLE 2-F-2 CRITERIA FOR AMDAL REQUIREMENT (ROAD CONSTRUCTION PROJECT) ...... 11 TABLE 2-F-1 OUTLINE OF TRANSPORT SERVICE ...... 13 TABLE 3-B-1 CLASSIFICATION OF PORTS...... 14 TABLE 3-D-1 TREND OF INVESTMENT ...... 15 TABLE 4-B-1 CONCEPT OF PORT CLASSIFICATION ...... 18 TABLE 4-C-1 MAJOR CONTAINER HANDLING PORT IN INDONESIA ...... 19 TABLE 4-C-2 CALLING VESSELS AT THE FIVE MAJOR PORTS ...... 20 TABLE 4-C-3 TOTAL CARGO THROUGHPUT AT THE FIVE MAJOR PORTS IN 2000 ...... 20 TABLE 4-C-4 GENERAL CARGO THROUGHPUTS AT THE FIVE MAJOR PORTS...... 20 TABLE 4-C-5 CONTAINER THROUGHPUT AT THE FIVE MAJOR PORTS ...... 20 TABLE 4-C-6 PASSENGER MOVEMENT AT THE FIVE MAJOR PORTS...... 21 TABLE 4-C-7 MAJOR CONTAINER TERMINALS IN INDONESIA...... 22 TABLE 4-C-8 CONTAINER TERMINAL FACILITIES AND PRODUCTIVITY ...... 23 TABLE 5-A-1 CONTAINER MOVEMENT BETWEEN INDONESIA/NORTH AMERICA ( ‘000 TEU )..... 24 TABLE 5-A-2 TOP 10 MAJOR PLAYERS IN INDONESIA/NORTH AMERICA TRADE IN 2001 ...... 24 TABLE 5-A-3 CONTAINER MOVEMENT BETWEEN INDONESIA/EUROPEAN NORTH CONTINENT... 25 TABLE 5-A-4 TOP 10 MAJOR PLAYERS IN INDONESIA/EUROPEAN NORTH CONTINENT TRADE IN 2001...... 25 TABLE 5-A-5 INDONESIA/ASIAN COUNTRIES BREAKDOWN IN 2001 ( TEU )...... 26 TABLE 5-B-1 STATUS OF FIVE PORTS BY MAJOR SHIPPING ROUTES...... 27 TABLE 5-B-2 CONTAINER THROUGHPUT IN SINGAPORE...... 27 TABLE 5-B-3 CONTAINER CARGO IN PORT KLANG ...... 28 TABLE 5-C-1 BACKGROUND AND OUTLINE OF MAJOR INTERNATIONAL CONTAINER TERMINAL OPERATORS...... 28 TABLE 5-C-2 INTERNATIONAL CONTAINER TERMINAL OPERATORS’ GLOBAL VOLUMES ( MILLION TEU )...... 29 TABLE 6-A-1 NUMBER OF PORTS IN THE STUDY AREA...... 30 TABLE 6-B-1 LIST OF AFFILIATED COMPANIES OF IPC2 ...... 32 TABLE 6-B-2 PORT RELATED GOVERNMENT AGENCIES ...... 32 TABLE 6-B-3 LOADING/UNLOADING CHARGE OF DOMESTIC CONTAINER CARGO ...... 33 TABLE 6-B-4 LOADING/UNLOADING OF CONTAINER ...... 34 TABLE 6-B-5 OUTLINE OF TARIFF SYSTEM AT CONVENTIONAL TERMINAL ...... 35 TABLE 6-B-6 FINANCIAL PERFORMANCE OF PORT IN 2000 ...... 35 TABLE 6-C-1 SHIP CALLS AT PORTS IN THE STUDY AREA...... 36 TABLE 6-C-2 CARGO THROUGHPUT BY PORT IN THE STUDY AREA...... 36 TABLE 6-C-3 CARGO THROUGHPUT BY PACKING TYPE IN THE STUDY AREA...... 37 TABLE 6-D-1 CONFIGURATION OF PORT FACILITIES...... 38 TABLE 6-D-2 BERTH LENGTH...... 39 TABLE 6-D-3 DETAILS OF BERTHS...... 41 TABLE 6-D-4 CARGO THROUGHPUTS BY TRADE TYPE...... 47 TABLE 6-D-5 CARGO THROUGHPUT BY PACKING TYPE ...... 47 TABLE 6-D-6 CONTAINER CARGO MOVEMENT BY TERMINAL...... 48 TABLE 6-D-7 LIST OF TERMINAL OPERATORS ...... 49 TABLE 6-D-8 BERTH OCCUPANCY RATIO...... 52 TABLE 6-D-9 WAITING TIME (AS OF MAR. & SEP. 2001, MAR. 2002) ...... 55 TABLE 6-D-10 HANDLING PRODUCTIVITY (AS OF MARCH 2002)...... 56 TABLE 6-D-11 BERTH-WISE UNLOADING/LOADING TYPE (AS OF MAR. & SEP. 2001, MAR. 2002) ...... 57 TABLE 6-D-12 CRANE PRODUCTIVITY IN CONTAINER TERMINAL...... 59 TABLE 6-D-13 DISTRIBUTION OF CONTAINER CARGO ...... 62 TABLE 6-D-14 IMPORT ORIGIN (KOJA, JAN.-MAY 2002) ...... 62

vi THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

TABLE 6-D-15 EXPORT DESTINATION (KOJA, JAN.-MAY 2002)...... 63 TABLE 6-D-16 FREIGHT VOLUME AT GEDEBAGE TERMINAL, 1992TO2001 ...... 64 TABLE 6-D-17 DEVELOPING FACILITIES...... 66 TABLE 6-F-1 PROPOSED PORT FACILITIES...... 68 TABLE 7-A-1 HISTORICAL TREND AND PROJECTION OF INDONESIA’S POPULATION ...... 71 TABLE 7-A-2 MACRO-ECONOMIC INDICATORS ...... 72 TABLE 7-B-1 METHODOLOGIES APPLIED FOR FORECASTING BY PACKAGE TYPE...... 75 TABLE 7-B-2 CARGO TONNAGE BY PACKAGE TYPE ...... 76 TABLE 7-B-3 FORECAST OF INTERNATIONAL CONTAINER THROUGHPUT, TANJUNG PRIOK ...... 77 TABLE 7-B-4 SUMMARY OF DEMAND FORECAST OF DOMESTIC CONTAINER, TANJUNG...... 77 TABLE 7-C-1 METHODOLOGIES FOR FORECASTING BY MAJOR COMMODITY/TRAFFIC TYPE...... 79 TABLE 7-C-2 SUMMARY OF DEMAND FORECAST BY MAJOR COMMODITY/TRAFFIC TYPE ...... 80 TABLE 8-A-1 ESTIMATED OFF-SHORE CAPACITY OF THE EXISTING TANJUNG PRIOK ...... 81 TABLE 8-A-2 CAPACITY AND DEMAND (CONTAINER, TANJUNG PRIOK)...... 82 TABLE 8-A-3 CAPACITY AND DEMAND (CONVENTIONAL CARGO, TANJUNG PRIOK)...... 83 TABLE 8-A-4 YARD/WAREHOUSE CAPACITY...... 84 TABLE 8-B-1 SECTIONAL ROAD TRAFFIC VOLUME (VEH/DAY)...... 87 TABLE 8-B-2 TRAFFIC VOLUME THROUGH GATES OF TANJUNG PRIOK PORT ...... 87 TABLE 8-B-3 DAILY TRAFFIC VOLUME OF PORT RELATED AND THROUGH TRAFFIC IN 2002...... 88 TABLE 8-B-4 SUMMARY OF FORECAST OF PORT RELATED TRAFFIC BY VEHICLE TYPE...... 88 TABLE 8-B-5 GROWTH RATE OF VEHICLE TYPE 2010 AND 2025...... 89 TABLE 8-B-6 FORECAST OF THROUGH TRAFFIC VOLUME (VEH/DAY) ...... 89 TABLE 8-B-7 FORECAST OF DAILY TRAFFIC VOLUME BY PCU...... 89 TABLE 8-B-8 CAPACITY OF EXISTING ROAD BY DIRECTION...... 90 TABLE 8-C-1 ENVIRONMENTAL FACTORS IN TANJUNG PRIOK, CIREBON, BANTEN/CIWANDAN AND BOJONEGARA ...... 92 TABLE 8-D-1 PORT DEVELOPMENT POTENTIAL VIEWING FROM NATURAL CONDITIONS ...... 93 TABLE 8-E-1 DISTRIBUTION OF CONTAINER CARGO VOLUME...... 94 TABLE 8-E-2 FUTURE DEVELOPMENT FOR TOLL ROAD...... 96 TABLE 9-B-1 CHANNEL CHARACTERISTICS OF MAIN ASEAN PORTS ...... 100 TABLE 9-E-1 PRELIMINARY COMPARISON FOR DEVELOPING AN AUTOMOBILE TERMINAL ...... 109 TABLE 9-E-2 SUMMARY OF FUNCTIONAL ALLOTMENT AMONG THE PORT IN WESTERN JAVA AREA ...... 110 TABLE 9-E-3 SUMMARY OF CARGO VOLUME ALLOTMENT AMONG THE PORT IN WESTERN JAVA AREA...... 110 TABLE 10-B-1 CARGO TONNAGE BY PACKAGE TYPE ...... 114 TABLE 10-B-2 SHIP SIZE DISTRIBUTION IN THE WORLD (GT-DRAFT)...... 115 TABLE 10-B-3 SHIP SIZE DISTRIBUTION AT TANJUNG PRIOK (LINER; MAR.01, SEP.02 & MAR.02) ...... 115 TABLE 10-B-4 TARGET SHIP SIZE AND DIMENSION ...... 115 TABLE 10-B-5 SHIP SIZE DISTRIBUTION AT TANJUNG PRIOK (INTER-ISLAND; MAR.01, SEP.02 & MAR.02)...... 116 TABLE 10-B-6 TARGET SHIP SIZE AND DIMENSION ...... 116 TABLE 10-B-7 SHIP SIZE DISTRIBUTION IN THE WORLD (GT-CAPACITY)...... 117 TABLE 10-B-8 SHIP DRAFT DISTRIBUTION ...... 117 TABLE 10-B-9 TARGET SHIP SIZE AND DIMENSION ...... 117 TABLE 10-B-10 TARGET SHIP SIZE AND DIMENSION ...... 118 TABLE 10-B-11 TARGET SHIP SIZE AND DIMENSION ...... 118 TABLE 10-B-12 WIDTHS OF MAIN CHANNEL...... 119 TABLE 10-C-1 PURE CAR CARRIER BERTH...... 120 TABLE 10-C-2 COMPARISON OF ALTERNATIVE SITES FOR THE AUTOMOBILE TERMINAL ...... 121 TABLE 10-C-3 EVALUATION OF CANDIDATE SITES FOR NEW PORT DEVELOPMENT...... 129 TABLE 10-C-4 LONG-TERM PROJECT COMPONENTS FOR TANJUNG PRIOK ...... 133 TABLE 10-D-1 BERTH PLANNING (CONTAINER TERMINAL) ...... 137 TABLE 10-D-2 BERTH PLANNING (MULTI PURPOSE TERMINAL, GENERAL CARGO BERTH) ..... 137 TABLE 10-D-3 EVALUATION ON THE ALTERNATIVES OF BREAKWATER ALIGNMENT...... 138 TABLE 10-D-4 LONG-TERM PROJECT COMPONENTS FOR BOJONEGARA...... 140

vii THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

TABLE 10-F-1 DREDGING VOLUME FOR CHANNEL AND BASIN IMPROVEMENT (TANJUNG PRIOK) ...... 143 TABLE 10-F-2 CAPITAL DREDGING VOLUME (BOJONEGARA) ...... 144 TABLE 10-F-3 SUMMARY OF CAPITAL COST (MILLION RP) OF TANJUNG PRIOK PORT UP TO 2025 ...... 146 TABLE 10-F-4 SUMMARY OF CAPITAL COST OF BOJONEGARA NEW PORT UP TO 2025 (MIL RP) 147 TABLE 10-G-1 EIRRS OF MASTER PLANS ...... 148 TABLE 10-H-1 RESULTS OF IEE (TANJUNG PRIOK) ...... 149 TABLE 10-H-2 RESULTS OF IEE (BOJONEGARA)...... 151 TABLE 11-A-1 TRAFFIC VOLUME EACH DIRECTION AND ROADS (PCU/DAY)...... 153 TABLE 11-A-2 CAPACITY OF TOLLWAY ...... 155 TABLE 11-A-3 SUMMARY OF TRAFFIC LANE REQUIREMENT AT TARGET YEARS ...... 155 TABLE 11-B-1 BACKGROUND AND PURPOSE: REVIEWED CONDITIONS FOR THE STUDY ...... 162 TABLE 11-B-2 EXISTING CONDITIONS AND ISSUES OF THE BUS TERMINAL...... 163 TABLE 11-B-3 COMPARISON OF THE ALTERNATIVES...... 165 TABLE 11-B-4 MAJOR POLICIES OF THE LAYOUT PLAN...... 166 TABLE 11-C-1 TRAFFIC FORECAST BY THE BOJONEGARA PORT DEVELOPMENT ...... 167 TABLE 12-A-1 PROJECT COMPONENTS TOWARD 2012 (TANJUNG PRIOK)...... 172 TABLE 12-A-2 PROJECT COMPONENTS TOWARD 2012 (BOJONEGARA) ...... 172 TABLE 13-B-1 MANNING SCALES AT SELECTED PORTS (PER SHIFT PER CRANE) ...... 187 TABLE 13-C-1 EVALUATION OF TERMINAL OPERATORS...... 192 TABLE 13-D-1 SCHEME OF PORT DEVELOPMENT, OPERATION AND MANAGEMENT...... 193 TABLE 14-A-1 DESCRIPTION OF PROJECT COMPONENTS ...... 200 TABLE 14-B-1 INTER-ISLAND CONTAINER TERMINAL BERTH FACILITY IN 2012...... 204 TABLE 14-C-1 DREDGING VOLUME FOR CHANNEL AND BASIN IMPROVEMENT...... 213 TABLE 14-C-2 COST ESTIMATE FOR URGENT REHABILITATION PLAN OF TANJUNG PRIOK...... 216 TABLE 14-D-1 CONSTRUCTION SCHEDULE FOR PACKAGE-1 PROJECTS (UP TO 2008)...... 218 TABLE 14-D-2 CONSTRUCTION SCHEDULE FOR PACKAGE-2 PROJECTS (UP TO 2012)...... 219 TABLE 14-E-1 POSSIBLE DEVELOPMENT SCHEME ...... 222 TABLE 14-F-1 EIRRS OF SHORT-TERM DEVELOPMENT PLANS ON TANJUNG PRIOK PORT ...... 223 TABLE 14-G-1 IMPLEMENTATION SCHEME...... 224 TABLE 14-G-2 CLASSIFICATION OF REVENUES FROM PORT ACTIVITIES ...... 224 TABLE 14-G-3 SENSITIVITY OF FIRR ON TERMINAL CHARGE AND DEMAND...... 225 TABLE 14-G-4 SENSITIVITY ANALYSIS ON FIRR OF IPC-2 (TERMINAL CHARGE=13US$/UNIT)226 TABLE 14-G-5 SENSITIVITY ANALYSIS ON FIRR OF TERMINAL OPERATOR (TERMINAL CHARGE=13US$/UNIT) ...... 226 TABLE 14-G-6 IMPLEMENTATION SCHEME...... 228 TABLE 14-G-7 SENSITIVITY ANALYSIS...... 229 TABLE 14-G-8 IMPLEMENTATION SCHEME...... 230 TABLE 14-G-9 SENSITIVITY ANALYSIS (PUBLIC SECTOR) (WHOLE PROJECT EXCLUDING ANCOL) ...... 231 TABLE 14-G-10 IMPLEMENTATION SCHEME...... 233 TABLE 14-G-11 SENSITIVITY ANALYSIS (PUBLIC SECTOR) (WHOLE PROJECT INCLUDING ANCOL) ...... 234 TABLE 14-H-1 MATRIX TABLE ...... 237 TABLE 14-H-2 PROPOSED ENVIRONMENTAL MANAGEMENT AND MONITORING PLAN ...... 241 TABLE 15-A-1 DESCRIPTION OF PROJECT COMPONENTS ...... 243 TABLE 15-B-1 DEPTH OF CONTAINER TERMINAL...... 245 TABLE 15-C-1 BOJONEGARA QUAY WALL OF CONTAINER WHARF ...... 248 TABLE 15-C-2 COST ESTIMATE FOR URGENT DEVELOPMENT PLAN OF BOJONEGARA...... 252 TABLE 15-D-1 TIME PERIOD FOR IMPLEMENTING URGENT AND SHORT TERM DEVELOPMENT PROJECT ...... 253 TABLE 15-D-2 CONSTRUCTION SCHEDULE OF THE URGENT DEVELOPMENT PLAN ...... 254 TABLE 15-F-1 EIRR OF SHORT-TERM DEVELOPMENT PLAN ON BOJONEGARA PORT ...... 257 TABLE 15-G-1 IMPLEMENTATION SCHEME...... 258 TABLE 15-G-2 SENSITIVITY ANALYSIS (PUBLIC SECTOR)...... 259 TABLE 15-G-3 SENSITIVITY ANALYSIS (PRIVATE SECTOR)...... 259

viii THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

TABLE 15-G-4 IMPLEMENTATION SCHEME...... 261 TABLE 15-G-5 SENSITIVITY ANALYSIS (PUBLIC SECTOR) (OPTIONAL CASE)...... 262 TABLE 15-G-6 SENSITIVITY ANALYSIS (PRIVATE SECTOR) (OPTIONAL CASE) ...... 262 TABLE 15-H-1 SUMMARIZED OVERALL EVALUATION ...... 263 TABLE 15-H-2 PROPOSED ENVIRONMENTAL MANAGEMENT AND MONITORING PLAN ...... 267 TABLE 16-A-1 INCOME STATEMENT OF IPC2 ...... 268 TABLE 16-A-2 INCOME STATEMENT OF TANJUNG PRIOK BRANCH OFFICE ...... 269 TABLE 16-A-3 IPC2 REVENUE SOURCES ...... 269 TABLE 16-A-4 PORTION OF REVENUE FROM TANJUNG PRIOK PORT ...... 270 TABLE 16-A-5 IPC2 EXPENDITURES ...... 270 TABLE 16-A-6 PORTION OF EXPENDITURE FROM TANJUNG PRIOK PORT...... 271 TABLE 16-A-7 CAPITAL FUND RAISING FOR INVESTMENT ...... 272 TABLE 16-A-8 REPAYMENT SCHEDULE...... 272 TABLE 16-B-1 ALLOCATION OF DGSC BUDGET IN THE YEAR 2003...... 273 TABLE 16-B-2 HISTORICAL TREND OF DGSC BUDGET FOR SEAPORT SUB-SECTOR...... 274 TABLE 16-B-3 OPERATIONAL REVENUE/COST BY IPCS IN 2000 ...... 274 TABLE 16-C-1FUND CONDITION IN 2025...... 275 TABLE 17-A-1 FACTORS IMPEDING TRADE FACILITATION ...... 277 TABLE 17-B-1 RESPONSIBILITIES/ROLES OF ORGANIZATIONS ...... 278 TABLE 17-D-1 PROPOSED COMMODITY CLASSIFICATION ...... 290

FIGURE 2-C-1 VALUE OF FOREIGN TRADE...... 7 FIGURE 2-F-1 PROCEDURE OF EIA ...... 12 FIGURE 6-A-1 LOCATION OF THE PUBLIC PORTS IN THE STUDY AREA...... 30 FIGURE 6-D-1 LAYOUT OF THE FACILITIES OF TANJUNG PRIOK...... 40 FIGURE 6-D-2 AERIAL VIEW OF TANJUNG PRIOK PORT ...... 42 FIGURE 6-D-3 SHIP MANEUVERING ...... 46 FIGURE 6-D-4 LOW BERTH OCCUPANCY RATIO (MARCH 2002) ...... 52 FIGURE 6-D-5 AVERAGE WAITING TIME OVER 12 HOURS (MARCH 2002) ...... 53 FIGURE 6-D-6 SHIP SIZE DISTRIBUTION OF CONTAINER VESSELS...... 60 FIGURE 6-D-7 SHIP SIZE CUMULATIVE CURVE FOR CONTAINER VESSELS (1) ...... 60 FIGURE 6-D-8 SHIP SIZE CUMULATIVE CURVE FOR CONTAINER VESSELS (2) ...... 61 FIGURE 6-D-9 CONTAINER DEPOSIT LOCATION ...... 65 FIGURE 6-F-1 ORIGINAL PLAN OF BOJONEGARA DEVELOPMENT (STAGE-1)...... 68 FIGURE 6-F-2 ORIGINAL PLAN OF BOJONEGARA DEVELOPMENT (STAGE-5, AFTER 10 YEARS).. 69 FIGURE 6-G-1 AERIAL VIEW OF BOJONEGARA NEW PORT SITE ...... 70 FIGURE 7-A-1 HISTORICAL TREND OF GDP GROWTH RATES OF INDONESIA...... 72 FIGURE 7-A-2 GROWTH RATES OF MAJOR TRADE PARTNERS ...... 73 FIGURE 7-B-1 TOTAL THROUGHPUT AT MAJOR METROPOLITAN PORTS ...... 76 FIGURE 8-A-1 QUAY SIDE CAPACITY AND DEMAND (INTERNATIONAL CONTAINER, TANJUNG PRIOK) ...... 82 FIGURE 8-A-2 QUAY SIDE CAPACITY AND DEMAND (INTER-ISLAND CONTAINER, TANJUNG PRIOK) ...... 82 FIGURE 8-A-3 QUAY SIDE CAPACITY AND DEMAND (GENERAL AND BAG CARGO)...... 83 FIGURE 8-A-4 QUAY SIDE CAPACITY AND DEMAND (DRY-BULK CARGO) ...... 83 FIGURE 8-A-5 QUAY SIDE CAPACITY AND DEMAND (LIQUID-BULK CARGO) ...... 84 FIGURE 8-B-1 TRAFFIC FLOW DIAGRAM AROUND TANJUNG PRIOK PORT AREA ...... 85 FIGURE 8-B-2 ROAD NETWORK AROUND TANJUNG PRIOK PORT ...... 86 FIGURE 8-E-1 CURRENT CARGO DISTRIBUTION...... 94 FIGURE 8-E-2 ROAD NETWORK IN FUTURE (WESTERN JAVA AREA)...... 95 FIGURE 8-E-3 ROAD NETWORK IN FUTURE (DKI AREA)...... 97 FIGURE 9-A-1 CURRENT SITUATION OF SHIP NAVIGATION ...... 99 FIGURE 9-B-1 BERTH PRODUCTIVITY AND HANDLING TARIFF –40F LADEN–...... 100 FIGURE 9-B-2 AUTOMOBILE TERMINAL IN LAEM CHABANG PORT (THAILAND) ...... 101 FIGURE 9-B-3 CHARGE FOR AUTOMOBILE EXPORT (PER 1 UNIT (12 TONNE), WITH 5 DAYS OF

ix THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

STORAGE)...... 101 FIGURE 9-D-1 DEMAND AND CAPACITY (INTERNATIONAL CONTAINER) ...... 104 FIGURE 9-E-1 BASIC FUNCTION OF THE PORTS ...... 105 FIGURE 9-E-2 CURRENT CONTAINER CARGO DISTRIBUTION ...... 105 FIGURE 9-E-3 BOJONEGARA HINTERLAND (CURRENT SITUATION AND FUTURE) ...... 106 FIGURE 9-E-4 DEMAND OF INTERNATIONAL CONTAINER CARGO FOR EACH PORT ...... 106 FIGURE 9-E-5 FUNCTIONAL ALLOTMENT OF INTER-ISLAND CONTAINER...... 107 FIGURE 9-E-6 FUNCTIONAL ALLOTMENT OF GENERAL AND BAG CARGO...... 107 FIGURE 10-A-1 DEVELOPMENT CONCEPT AND CORE PROJECTS...... 113 FIGURE 10-C-1 ALTERNATIVE LOCATIONS FOR AN AUTOMOBILE TERMINAL ...... 122 FIGURE 10-C-2 EXPECTED ACCESS ROUTES FROM AUTOMOTIVE MANUFACTURING FACTORIES TO THE PORT ...... 122 FIGURE 10-C-3LOCATION OF MAJOR AUTOMOTIVE MANUFACTURING COMPANIES...... 123 FIGURE 10-C-4 INTER-ISLAND CONTAINER HANDLING ZONE ...... 124 FIGURE 10-C-5 PERTAMINA RELOCATION AND INTERNATIONAL CONTAINER TERMINAL CONSOLIDATION ...... 125 FIGURE 10-C-6 LAND-USE RE-DEVELOPMENT...... 128 FIGURE 10-C-7 CANDIDATE SITES FOR NEW PORT DEVELOPMENT AREA...... 129 FIGURE 10-C-8 CURRENT EAST-ANCOL DEVELOPMENT PLAN...... 130 FIGURE 10-C-9 MODIFICATION OF THE CURRENT RECLAMATION PLAN ...... 130 FIGURE 10-C-10 LAYOUT OF PORT FACILITIES IN TANJUNG PRIOK (TOWARD 2025) ...... 134 FIGURE 10-C-11 LAND-USE PLAN OF TANJUNG PRIOK (TOWARD 2025) ...... 134 FIGURE 10-D-1 ALTERNATIVES FOR BREAKWATER ALIGNMENT (ALTERNATIVE-A)...... 138 FIGURE 10-D-2 ALTERNATIVES FOR BREAKWATER ALIGNMENT (ALTERNATIVE-B)...... 138 FIGURE 10-D-3 LAYOUT PLAN OF BOJONEGARA FOR 2025 ...... 140 FIGURE 11-A-1 TOLLWAY LOCATION MAP ...... 154 FIGURE 11-A-2 EASTERN ACCESS PORT HIGHWAY PLAN AND PROFILE ...... 159 FIGURE 11-A-3 JORR NORTHERN EXTENSION PLAN AND PROFILE ...... 160 FIGURE 11-A-4 WESTERN ACCESS PORT HIGHWAY PLAN AND PROFILE ...... 161 FIGURE 11-B-1 PROPOSED LAYOUT PLAN ...... 166 FIGURE 11-C-1 BOJONEGARA ACCESS ROAD TYPICAL CROSS SECTION ...... 168 FIGURE 11-C-2 BOJONEGARA NATIONAL ROAD PLAN AND PROFILE...... 168 FIGURE 12-B-1 LAYOUT OF THE PORT FACILITIES IN 2012 (TANJUNG PRIOK) ...... 172 FIGURE 12-B-2 LAYOUT OF THE PORT FACILITIES IN 2012 (BOJONEGARA) ...... 172 FIGURE 12-C-1 PHASED DEVELOPMENT PLAN (TANJUNG PRIOK) ...... 175 FIGURE 12-C-2 PHASED DEVELOPMENT PLAN (BOJONEGARA)...... 175 FIGURE 13-C-1 UTILIZATION OF LAND AT CONVENTIONAL TERMINAL AREA...... 191 FIGURE 13-G-1 PORT WORKING AND INTEREST AREA ...... 197 FIGURE 13-G-2 PORT WORKING AND INTEREST AREA ...... 197 FIGURE 14-A-1 DEMAND AND CAPACITY (INTERNATIONAL CONTAINER) ...... 198 FIGURE 14-A-2 LAYOUT PLAN OF URGENT REHABILITATION PROJECT OF TANJUNG PRIOK PORT ...... 200 FIGURE 14-B-1 LAYOUT OF AUTOMOBILE TERMINAL...... 203 FIGURE 14-B-2 AERIAL VIEW OF THE SITE...... 203 FIGURE 14-B-3 LAYOUT OF INTER-ISLAND CONTAINER TERMINAL IN PIER-III ...... 204 FIGURE 14-B-4 TERMINAL LAYOUT IN ANCOL AREA ...... 206 FIGURE 14-B-5 REQUIRED LANE NUMBERS...... 208 FIGURE 14-B-6 ALIGNMENT OF PORT INNER ROADS...... 209 FIGURE 14-B-7 PASOSO FLYOVER PLAN AND PROFILE...... 210 FIGURE 14-C-1 TYPICAL CROSS SECTION OF AUTOMOBILE TERMINAL WHARF...... 212 FIGURE 14-C-2 TYPICAL SECTION OF PROPOSED NEW BREAKWATER...... 213 FIGURE 14-C-3 LOCATION MAP OF DISPOSAL AREA OF DREDGED MATERIAL OF TANJUNG PRIOK ...... 214 FIGURE 14-E-1 ALTERNATIVE SCHEMES FOR DEVELOPMENT AND OPERATION OF AUTOMOBILE TERMINAL ...... 221 FIGURE 14-G-1 RELATION BETWEEN TERMINAL CHARGE AND FIRR ...... 225 FIGURE 14-G-2 CASH ENDING (MILLION RP) AND DSCR (IPC2)...... 226

x THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

FIGURE 14-G-3 CASH ENDING (MILLION RP) AND DSCR (TERMINAL OPERATOR) ...... 227 FIGURE 14-G-4 CASH ENDING (ANNUAL COMPENSATION = 4,300 MILLION RP) ...... 227 FIGURE 14-G-5 CASH ENDING (LUMP-SUM COMPENSATION = 45,000 MILLION RP) ...... 228 FIGURE 14-G-6 CASH ENDING OF EACH BODY ...... 229 FIGURE 14-G-7 OPERATING REVENUE ...... 231 FIGURE 14-G-8 CASH OUTFLOW (PROJECT ITSELF)...... 231 FIGURE 14-G-9 CASH OUTFLOW (WITH PROJECT)...... 232 FIGURE 14-G-10 CASH ENDING ...... 232 FIGURE 14-G-11 DEBT SERVICE COVERAGE RATIO...... 232 FIGURE 14-G-12 OPERATING REVENUE ...... 234 FIGURE 14-G-13 CASH OUTFLOW (PROJECT ITSELF)...... 234 FIGURE 14-G-14 CASH OUTFLOW (WITH PROJECT)...... 235 FIGURE 14-G-15 CASH ENDING ...... 235 FIGURE 14-G-16 DEBT SERVICE COVERAGE RATIO...... 235 FIGURE 15-A-1 LAYOUT PLAN OF URGENT DEVELOPMENT PROJECT OF BOJONEGARA NEW PORT ...... 243 FIGURE 15-B-1 LAYOUT OF URGENT DEVELOPMENT PLAN FOR BOJONEGARA (UP TO 2010).... 247 FIGURE 15-C-1 BOJONEGARA QUAY WALL OF CONTAINER BERTH (CONCRETE CAISSON, LWS-14 M)...... 248 FIGURE 15-C-2 BOJONEGARA QUAY WALL OF MULTI PURPOSE BERTH (CONCRETE CAISSON, -10 M)...... 249 FIGURE 15-C-3 TYPICAL SECTION OF BOJONEGARA BREAKWATER...... 250 FIGURE 15-C-4 DISTRIBUTION OF DISCHARGE FLOW ...... 252 FIGURE 15-E-1 LOCATION OF THE GATE ...... 255 FIGURE 15-G-1 OPERATING REVENUE ...... 260 FIGURE 15-G-2 CASH OUTFLOW ...... 260 FIGURE 15-G-3 CASH ENDING ...... 260 FIGURE 15-G-4 DEBT SERVICE COVERAGE RATIO...... 261 FIGURE 15-G-5 DEBT SERVICE COVERAGE RATIO...... 261 FIGURE 16-A-1 FLOWCHART OF REVENUE AND EXPENDITURE...... 268 FIGURE 16-A-2 IPC2 REVENUE RESOURCES IN 2002...... 270 FIGURE 16-A-3 IPC2 EXPENDITURES IN 2002...... 271 FIGURE 16-A-4 REVENUE AND EXPENDITURE...... 271 FIGURE 17-B-1 IMPROVEMENT OF REVENUE/EXPENSE STRUCTURE OF IPC2 & CONTRIBUTION TO THE NATIONAL FINANCES...... 280 FIGURE 17-B-2 DECISION PROCEDURE OF TARIFF...... 281 FIGURE 17-B-3 SUPERVISION/MONITORING PROCEDURE FOR TERMINAL OPERATION ACTIVITIES ...... 282 FIGURE 17-B-4 CHANGE IN PORT TARIFFS AT TG. PRIOK SINCE MID-1990S ...... 284 FIGURE 17-B-5 SUMMARY OF IPC2 REVENUE IN 2000...... 284 FIGURE 17-D-1 ILLUSTRATION OF TARGETS IN “CAPACITY BUILDING PROGRAM” ...... 292 FIGURE 17-D-2 ILLUSTRATION OF TARGETS IN “CAPACITY BUILDING PROGRAM” ...... 293 FIGURE 17-D-3 ILLUSTRATION OF ADMINISTRATION & MANAGEMENT SKILL ENHANCEMENT PROGRAM...... 297

xi THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-1 OUTLINE OF THE STUDY

CHAPTER-1. OUTLINE OF THE STUDY

1. In response to a request from the Government of the Republic of Indonesia (hereinafter referred to as “GOE”), the Government of Japan (hereinafter referred to as “GOJ”) has decided to conduct the Study for Development of the Greater Jakarta Metropolitan Ports in the Republic of Indonesia (hereinafter referred to as “the Study”).

2. Accordingly, the Japan International Cooperation Agency (hereinafter referred to as “JICA”), the official agency responsible for the implementation of the technical cooperation programs of GOJ, dispatched a preparatory study team to Indonesia in November 2001, and reached an agreement with GOE on the scope of the Study.

3. JICA dispatched a full-scale study team (hereinafter referred to as “the Study Team”, in May 2002 to carry out the Study. The reports submitted to the Indonesian side through the Ministry of Communication by the Study Team are as follows:

w Inception Report Submitted in May 2002 w Progress Report (I) Submitted in September 2002 w Interim Report (I) Submitted in November 2002 w Progress Report (II) Submitted in February 2003 w Interim Report (II) Submitted in May 2003 w Progress Report (III) Submitted in July 2003 w Draft Final Report Submitted in September 2003 w Final Report Completed in November 2003

1-A. BACKGROUND OF THE STUDY

4. The Indonesian economy now appears to be in the process of recovery following the economic crisis of 1997. The Indonesian economy had enjoyed a high growth rate of not less than 6% in 1980s and the first half of 1990s. Nevertheless, annual income per capita in Indonesia has been low compared to other Asian countries partly due to its large population. Accordingly, it is essential for Indonesia to attain steady and sustainable economic growth.

5. Jakarta DKI, West Java province and Banten province (hereinafter referred to as “the West Java area”) will continue to play an important role in Indonesia’s socio-economic development. In fact, the West Java area, including the capital city Jakarta, has large shares of population and GDP for all Indonesia (around 30 % and 25% respectively). Huge investment has been made in this area and new industrial areas are now being developed. Investment in this area is vital to the overall recovery of the Indonesian economy.

6. It can be said that the recent increase in import and export cargo is largely a result of the economic recovery as well as the investment initiatives mentioned above. Particularly, the port of Tanjung Priok located in Jakarta city and being the most multifunctional primary port in Indonesia, handled over 2.3 million TEUs in 2001 in container throughput. It ranks 20th among world container ports, handling around half of the total container cargo in Indonesia.

7. In order to alleviate the severe economic situation and to achieve sustainable economic growth, the most important task is to establish an effective and efficient cargo distribution system which can serve the trading industry sector’s needs for reliable transportation services. However, it is a fact that the capital port, namely the Port of Tanjung Priok, is facing some

1 THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-1 OUTLINE OF THE STUDY

difficulties stemming from its location in the center of the capital city. The Port area as well as the hinterland city area is heavily congested, and this results in inefficient cargo movement.

8. Under this situation, Indonesian Port Corporation 2 (IPC2), which is responsible for the development of main ports located in the West Java area, has been examining the feasibility of developing an alternative container port to Tanjung Priok Port in the Bojonegara area, since the demand volume of container cargo in West Java area will exceed the present cargo handling capacity of Tanjung Priok Port in a few years. The Bojonegara area would seem to have a number of advantages because of its location facing the international sea lane i.e. the Sunda strait and relative calmness of the bay behind small islands. With regard to the method of its development, IPC2 is considering private sector participation provided that the project is viable enough to attract the private investment.

9. On the other hand, in recent years, the global circumstances surrounding container cargo have been changing dramatically. Major trends and strategy of world container carriers are: alliances of shipping lines; selecting hub ports called by large-sized container fleets; intensive investment in strategic ports by container terminal operators. These trends make the criteria of selecting ports more severe, and thus, global competition among ports to attract as many cargoes as possible is heated. The emergence of a new container terminal can pose a real threat to existing neighboring terminals such as in the case in Tanjung Pelepas Port in Malaysia and the Port of Singapore.

10. Taking into consideration the above situation, the development of container ports in West Java area is extremely urgent. Thus, a comprehensive study to formulate a strategic plan for port development in West Java area was urgently needed considering the development projects in both Tanjung Priok Port and the Bojonegara Port.

1-B. PURPOSE OF THE STUDY

11. The purposes of the Study are:

Ø To identify the development potential of the ports in the Study Area and to define the future role of ports in the Study Area; Ø To prepare a port development/administration strategy in the Study Area comprising demand forecast, a port development concept including a role as an international/ regional container hub port, a port administration / management system, introduction of privatization schemes, and so forth (target year 2025); Ø To prepare a master plan for comprehensive development/administration of Tanjung Priok Port and Bojonegara Port, taking into account proper functional allotment between two ports (target year 2025); Ø To prepare a short-term development/administration plan for Tanjung Priok Port and Bojonegara Port (target year 2012); Ø To carry out a feasibility study for the priority project (target year 2012).

1-C. STUDY AREA

12. The Study covers such ports as Tanjung Priok Port, Bojonegara Port, and the other ports including special wharves in the northern part of the coastal area in the West Java area as well as hinterlands of these ports.

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CHAPTER-1 OUTLINE OF THE STUDY

1-D. STUDY SCHEDULE

Preparatory Work in Japan Mar. 2002

Inception Report Mid-May 2002 First Work in Indonesia ~ Review & Surveys of the Present Situation Mid-Sep. 2002 Discussion on Basic Policy toward Formulating a Port Development Strategy in West Java Progress Report (I)

Mid-Sep. 2002 First Work in Japan ~ Formulation of a Port Development Strategy in West Java (Target year 2025) Mid-Nov. 2002 (2 months)

Interim Report Mid Nov. 2002 Second Work in Indonesia ~ Formulation of a Master Plan for Development of Tanjung Priok Port & Bojonegara Port (Target year 2025) Mid Feb. 2003 Seminar Featuring the Outline of the Progress Report (2) Progress Report (II)

Mid Feb. 2003 Second Work in Japan ~ Formulation of a Short-term Development Plan for Urgent Projects (Target year 2012) Mid Mar. 2003 Formulation of an Urgent Development Plan for Bojonegara Port (Target year 2005)

Interim Report (II) Mid May. 2003 Third Work in Indonesia ~ Discussion & Examination toward the Feasibility Study (Financial and Institutional Viability, Road Network Mid Jul. 2003 etc.) Progress Report (III)

Mid May. 2003 Third Work in Japan ~ Feasibility Study on the Priority Project Mid Jun. 2003 Recommendations

Fourth Work in Indonesia Draft Final Report Sep. 2003 Seminar Featuring the Outline of the Draft Final Report

Forth Work in Japan Nov. 2003 Preparation of the Final Report Final Report

1-E. IMPLEMENTATION ORGANIZATION

JICA Study Team

13. The Study Team was made up of the experts listed below.

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Expert Assignment Mr. Hidehiko KURODA Team Leader / Port Policy Mr. Koichi MIYAKE Port Planning (1) / Port Facility Planning Mr. Masahiro IWADE Port Planning (2) / Port Functional Allotment Port Administration /Port Management Body System Mr. Mitsugu KAWADA Port Administration /Administration System /Capacity Building Mr. Masayuki FUJIKI Management & Operation(1) / Management & Operation Planning Mr. Yoshihisa TATENO Management & Operation(2) / Privatization Mr. Atsushi SATO Engineering Design Mr. Hiroshi KATO Demand Forecast Mr. Toshihiko KAMEMURA Economic Analysis / Financial Analysis Mr. Taichiro KURAYAMA Road Planning Mr. Ken OMURA Inter-model Terminal Area Re-development Mr. Toru WATANABE Natural Condition Mr. Kazutoshi KASHIMA Construction Program / Cost Estimation Mr. Kennichi KURAMOTO Environmental Consideration Mr. Hiroshi MAEDA Coordination Mr. Kenji NAKANISHI Coordination

Counterpart and Coordination Committee

14. Ministry of Communication (hereinafter referred to as “MOC”), served as a counterpart agency of the Study Team. MOC established a steering committee composed by officials of the following agencies.

w MOC w BAPPENAS w Indonesia Port Corporation 2 (hereinafter referred to as “IPC-2”) w Ministry of State-owned Enterprises w Related provincial governments (Jakarta DKI and Banten)

15. The committee was chaired by Ir. Tjuk Sukardiman, Director General of Sea Communication, MOC (or represented by Ir. Djoko Pramono, Director of Ports and Dredging). MOC also established a working team to coordinate the day-to-day progress of the Study. Ir. Djoko Pramono, Director of Ports and Dredging (or represented by Ir. Suwandi Saputro, Head of Sub Directorate of Port Development).

1-F. COMPOSITION OF THE REPORTS

16. Final report of this Study consists of Summary Report, Main Report (Volume I to IV) and Supporting Report of Engineering Study.

w Summary Report w Main Report (Vol.I) Socio-economic Conditions w Main Report (Vol.II) Development Potential and Strategy w Main Report (Vol.III) Master Plan w Main Report (Vol.IV) Feasibility Study w Supporting Report of Engineering Study

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CHAPTER-2 OVERVIEW OF SOCIO-ECONOMY IN INDONESIA AND THE STUDY AREA

CHAPTER-2. OVERVIEW OF SOCIO-ECONOMY IN INDONESIA AND THE STUDY AREA

2-A. GEOGRAPHICAL FEATURE

17. The study area, defined as the northern part of the coastal area in western Java as well as hinterlands of these parts, comprises three provinces, DKI Jakarta, Banten and West Java, and its extension of the coastal line stretches about 400 km. The northern part of the coastal area of western Java is characterized by the following:

· The topography of the coastal area consists of a narrow band of low lying coastal flats constrained by the sea on the north and mountains on the south. · The coastal areas adjacent to the west of Jakarta are swampy lowlands that are difficult to use and left undeveloped mainly due to environmental reasons. · Much of its coastline exposed to the Java Sea is shallow with a tidal range of only about 1 meter. The coastal area suffers from siltation and it seems to be difficult to maintain a deep navigation channel. · The only suitable sites for port development are on the coastline from the west of Banten Bay to Anyer. The sites in the coastal area are comprised of rocky beaches and coral reef in the shallow parts.

18. The Greater Jakarta area continues to sprawl out from the center, mainly south toward Bogor, but also west toward Tangerang and east toward Bekasi. Much new residential, commercial and light industrial development is taking place east of Bekasi and around Bandung.

19. With respect to Banten province, in which the proposed Bojonegara development site is located, economic development depends on light industry between Tangerang and Serang, and heavy industry in the Cilegon area and along the Banten peninsula.

Table 2-A-1 Area & Population

Population GRDP 2000 Area Population 2000 Density at current prices (Unit) (km2) (%) (1,000) (%) (per km2) (Billion Rp.) (%) DKI Jakarta 1) 664 0.0% 8,385 4.1% 12,628 188,036 14.6% Jawa Barat 2) 34,017 1.8% 35,455 17.4% 1,042 134,661 10.4% Banten 3) 9,160 0.5% 8,098 4.0% 884 46,969 3.6% Sub-toal 43,841 2.3% 51,938 25.5% 1,185 369,666 28.6% Jawa 4) 127,499 6.6% 120,430 59.2% 945 585,192 * 45.3% Sumatra 4) 482,393 25.1% 42,665 21.0% 88 224,456 * 17.4% Bali, Nusa Tenggara 4) 73,135 3.8% 10,876 5.3% 149 28,361 * 2.2% Kalimantan 4) 547,891 28.5% 10,947 5.4% 20 89,186 * 6.9% Sulawesi 4) 191,800 10.0% 14,446 7.1% 75 47,146 * 3.7% Maluku, Papua 4) 499,852 26.0% 4,091 2.0% 8 22,322 * 1.7% Indonesia 4) 1,922,570 100.0% 203,456 100.0% 106 1,290,684 100.0% Source 1) Jakarta Dalam Angka 2000, BPS - Statistics DKI Jakarta 2) Jawa Barat Dalam Angka 2000, BPS, Propinsi Jawa Barat 3) Banten Dalam Angka Tahun 2000, Bapeda Propinsi Banten dan BPS Kabupaten Serang 4) Statistik Indonesia 2000, Badan Pusat Statistik, Jakarta - Indonesia * 1999 value

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2-B. ADMINISTRATION SYSTEM

20. The Indonesian government has started a wide-ranging process of decentralization, transferring major administrative and fiscal responsibilities to local governments based on the Law No.22, 1999. Under these circumstances, administration system of Indonesia has been dramatically changing.

21. Administration of the Study area is as follows: DKI Jakarta consists of 5 districts. The capital of Banten province is Serang city and consists of 4 regencies and 2 cities including capital city. The capital of West Java province is Bandung city and consists of 16 regencies and 6 cities including the capital.

2-C. ECONOMIC PERFORMANCE IN THE PAST

GDP & GRDP

22. Following robust economic growth that began in the early 1990’s, the Indonesian economy suffered a steep 13.1% drop in 1998 during the Asian economic crisis. Economic growth recovered only in 2000 at a rate of 4.9%, after registering a marginal growth rate of 0.8% in 1999. It is reported that a 3.3% growth rate was also registered in 2001. Most economists agree that Indonesia needs a sustained period of strong economic growth and low inflation in order to consolidate its recovery from the 1997-98 financial crisis. Indonesia's present 4-percent GDP growth rate is only slightly more than half of the 7.2 percent average GDP growth the country experienced from 1990-96.

23. Regarding industrial origin, Manufacturing Industry sector has been playing the leading role for economic growth, and its contribution to GDP accounted for 26.0 % in 2000. The next significant industry is Agriculture sector with contribution to GDP of 16.9%, followed by Trade, hotel and restaurant sector with 12.9% contribution. On the other hand, Transportation and Communication sector registered the highest growth rate at 9.38% in 2000, followed by electricity-gas and water supply sector at 8.78 %.

24. Among the 26 provinces in Indonesia, West Java Province has the highest GRDP value in terms of GRDP without oil & gas at constant 1993 price. West Java Province accounts for 16.56% of the national total GDP, and DKI Jakarta is second, producing 16.33% of the national total. Combined share of the two provinces accounts for one third of Indonesian GDP.

Employment

25. Among 91 million labor force in whole Indonesia, 55 million workers reside in Java Island. As for manufacturing industry, 9.3 million workers reside in Java Island, which account for 17.0% of the total labor force in Java while account for 76.9% of total labor force of manufacturing industry in whole Indonesia.

Investment

26. After the crisis, foreign investment fell to about one third of the pre-crisis level. Two major sectors, Manufacturing sector and Wholesale and retail, restaurants and hotels sector, remain dominant in this field, collectively accounting for 70 to 80% of the total foreign investment.

Trade

27. The table below shows historical development of Indonesian without oil and gas trade, both export and import, in monetary terms. Due to the economic and financial crisis, export value

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slightly decreased by 2 per cent in 1998, and again dropped by more than 5 per cent in 1999. After the two consecutive years’ slump, Indonesian non-oil and gas export increased by 22.85 per cent, from US$38,873 Billion in 1999 to US$47,757 Million in 2000. Import activities were more severely influenced by the economic crisis than export activity judging by the statistics.

60,000 Exports 50,000 Imports 40,000 30,000

million US$ 20,000 10,000 0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Figure 2-C-1 Value of Foreign Trade

28. As for main trading partners both for export and import, Japan is the most significant trade partner in terms of total trade value. Total trade volume between Indonesia and Japan reaches nearly 55 million tons and US$20 billion. The second is the United States of America, totaling about 11 million tons and US$12 billion. Singapore is also an important trade partner and the largest volume of export cargo goes to Singapore. Australia is a big neighboring country and one of the biggest trade partners.

29. Indonesia’s main export commodities are rubber, tea, tobacco, shrimp, and coffee in the agriculture sector, and copper and tin in the mining sector. Garment, textile, and plywood also play a significant role. Electronic appliances export has been increasing recently.

Financial Performance of the Government

30. Indonesia's official debt burden increased from 27% of GDP prior to the financial crisis to approximately 100% of GDP at the end of 2000. Although Indonesia has shouldered high debt/GDP ratios in the past (most recently in the late 1980s), the costs of servicing the country's official debt has placed a heavy burden on the budget. In 2001, interest payments on Indonesia's domestic and foreign debt were forecast to reach almost 35 percent of central government expenditures.

2-D. SOCIO-ECONOMIC REFORMS OF THE GOVERNMENT

31. With regard to structural reforms for growth, the Indonesian government reached an agreement with the IMF on a three-year economic stabilization and recovery program. The agreement has been revised repeatedly in response to deteriorating macroeconomic conditions and political changes, however, the following are the key economic and structural reform challenges of the Indonesian Government.

· Restoring balance to Indonesia's economy by reducing inflation, controlling the

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GOI's budget deficit, and spurring economic growth. · Enhancing the environment for foreign investment by improving security, reducing political conflict, and improving the functioning of Indonesia's commercial courts. · Increasing state budget revenues by expanding Indonesia's income tax base and privatizing state-owned enterprises (SOEs). · Refining budget mechanisms under fiscal decentralization in order to improve administrative capacity at the district level, improve the equity of resource transfers among the regions, and reduce the overall fiscal burden of the program on the central government budget. · Increasing transparency and accountability of government operations.

32. Those challenges are basically being coped with by moving in the following two directions: Privatization and Decentralization.

Privatization

33. In terms of privatizing SOEs, to enhance the efficiency of SOEs and as part of Indonesia's ongoing IMF-supported economic reform program, the GOI established an ambitious timetable to divest majority ownership in SOEs. For the 2001-2002 period, the Government plans to privatize at least 16 SOEs to generate funds for two purposes: to pay the interest of re-capitalization bonds, and to help reducing State Budget deficit. IPC-I~IV is not included in the above plan.

34. With regard to private sector participation, corresponding with the recent recovering economic condition in Indonesia, the Presidential Decree (Keppres No.15/2002) was issued pushing the related Ministers to expedite evaluating feasibility and resuming the projects which had been postponed and/or re-investigated in the previous decree (Keppres No.39/1997).

35. In the transport sector, Indonesia has been one of the main East Asian countries implementing private toll road BOTs. In developing a framework for private sector participation in roads, the Government has passed through the following stages:

· Toll roads financed, constructed and operated by a government body (1978-1983) · Toll roads financed with foreign development loans (1983-1990) · Non competitive engagement of the private sector in toll road construction and operation through BOT projects (1987-1993) · Open competitive and tendering of BOT toll road projects (1994-present)

36. Railways are state-owned, however, Perum Kerata Api (SOE) started partial privatization by inviting private companies to form service joint ventures on a profit-sharing basis. In port development, Indonesia awarded a management contract to a private company for operating container terminal in Tanjung Priok, i.e., JICT and Koja terminal. With regard to airport investment, reforms introduced in 1994 enables a greater extent of private and foreign investment in airport primarily through the BOT scheme.

Decentralization

37. On January 1, 2001, two decentralization laws (Law 22&25/1999) devolving authority and funding to district governments entered into effect. Local governments were simultaneously given responsibility for public sector activities in health, education, and rural and urban

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infrastructure, along with authority over more than 2.3 million former central government staff. The revenue sharing provisions of Law 25/1999 on fiscal decentralization also added a new structural burden to the central government budget. This requires the central government to transfer to the regions 25 percent of central government revenues. It also contains provisions requiring the central government to share natural resource revenues with the regions.

38. The process of decentralization generates local responsibility for local problems, and encourages participation and regional relevance of public sector services and initiatives. Set against a backdrop of several decades of increasing central government authority, decentralization is a radical move. Local governments have made considerable efforts to meet their new responsibilities, however, major deficiencies remain in operating guidelines for local service providers, particularly in introducing minimum service standards and ensuring compliance and consistency between local regulations and national policies. In addition, observers highlight uneven capacity at the regional level to administer the budgets, as well as wide disparities in revenues between resource-rich and poor regions

39. In addition, the newly amended law on local taxation gives local governments the freedom to impose new taxes and levies within certain limits. Many local governments enacted new taxes in the first half of 2001. Many of these measures threaten to discourage trade, transit, and business activities across regions. It is not clear whether the central government will act to rein in those taxes that are unnecessarily burdensome. Local governments now have the authority to approve investments in all areas except oil and gas, however, investment rules and procedures such as approval criteria for new investments, licensing arrangements remain unclear.

40. The situation is almost same in infrastructure development such as road and port. Local governments now strongly intend to have their own plan for infrastructure development viewing from the local interest, while the central government has plans from the national social-economic viewpoint. At present, we find a lot of inconsistency and controversy among the plans. Planning rules and procedures as well as financial scheme for infrastructure development still remain unclear.

2-E. NATIONAL/REGIONAL DEVELOPMENT PLAN

National Development Plan

41. In chronicle, there were five (5) REPELITAs which had been carried out under the PJP I (1969-1994) followed by REPELITA VI (1994/95-1998/99) under the PJP II (1994-2019). However, being influenced by the crisis, REPELITA VI was suspended and re-examined, and as a result, based on the latest GBHN (1999-2004), the current Five-Year Plan, PROPENAS (2000-2004), has been formulated by BAPPENAS, National Development Planning Agency which is responsible for preparing long, medium and short-term planning from the national view point.

42. PROPENAS (2000-2004) gives priority to accelerating economic recovery and strengthening the foundation of sustainable and fair development and raises the following programs:

· To create macro-economic stability that is conductive for increasing investment and exports · To stimulate increases in competitiveness especially for increasing non-oil & gas exports · To promote investment mainly equity rather than loan

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· To provide economic development facilities and infrastructure restructuring. Table 2-E-1 Macro-economic Framework Indicator 1999 2000 2001 2002 2003 2004 Inflation rate, CPI (%) 2.0% 7-9% 6-8% 5-7% 4-6% 3-5% Exchange rate (Rp/US$) 7,809 7,000 7,000 6,500 6,500 6,500 GDP growth (%) 0.3% 4-5% 4.5-5.5% 5-6% 6-7% 6-7% Agriculture 2.1% 1.4% 2.5% 2.5% 2.7% 2.9% Manufacturing Industry 2.6% 4.8% 6.4% 7.3% 8.4% 9.2% Non-oil and gas 2.2% 5.5% 6.9% 7.9% 9.2% 10.0% Others ▲ 1.2% 5.3% 5.5% 6.0% 6.2% 6.4% Contribution to GDP growth Consumption 2.6% 0.9% 1.0% 2.6% 3.0% 3.8% Private 2.5% 1.4% 1.8% 2.9% 3.0% 3.8% Government 0.0% ▲ 0.5% ▲ 0.8% 0.0% ▲ 0.1% 0.0% Investment ▲ 5.3% 0.4% 2.0% 2.6% 3.6% 3.1% Private ▲ 5.6% 0.6% 1.7% 2.4% 3.1% 3.3% Government 0.4% ▲ 0.2% 0.3% 0.2% 0.5% ▲ 0.2% Export (net) 3.0% 3.2% 2.2% 0.5% ▲ 0.2% ▲ 0.2% Private ▲ 11.3% 1.3% 2.3% 1.1% 0.8% 1.0% Government 14.3% 1.9% ▲ 0.1% ▲ 0.6% ▲ 1.0% ▲ 1.3% GDP per/c (at 1998 constant, Rp) 4,785.0 4,929.0 5,111.0 5,328.0 5,583.0 5,873.0 GDP per/c growth 3.0% 3.7% 4.2% 4.8% 5.2% Current account deficit / GDP (%) 4.0% 4.8% 3.7% 1.8% 0.0% -1.1% Total investment (% in GNI) 12.5% 19.3% 20.5% 22.2% 24.7% 28.3% Private 7.2% 14.6% 15.7% 17.4% 19.6% 23.8% Government 5.3% 4.7% 4.9% 4.8% 5.1% 4.5% Source: PROPENAS

Regional Development Plan

43. The framework of regional development planning was drastically changed in the stream of decentralization. The PROPENAS, national development plan, does not give any concrete activities for individual regional development except for a few special areas, while the former REPELITA had given the development guidelines for the Province. The authority to draw specific plans for regional development was given to the local government. Each province and/or regency/city (Kabupaten/Kota) should prepare a five-year program (PROPEDA) which contains a basic guideline for regional development, and a five-year strategic plan (RENSTRADA) which gives concrete targets, projects, evaluation scheme etc. BAPPEDA, Regional Planning Board under the jurisdiction of Department (Ministry) of Home Affairs, is playing a key role in formulating the program and/or plan and coordinating among sectoral units of province, regency/city and central government.

44. At this moment, the progress of PROPEDA/RENSTRADA is at a different level in each province, regency/city. While some have already finalized their plans, the lack of human resources at local governments due to decentralization and confusion over financial allocation between the central and local governments is making this a difficult task.

2-F. ENVIRONMENTAL CONSERVATION POLICY

45. Indonesia Government’s policy on environmental conservation is stated in PROPENAS 2000-2004. Government aims at the “Sustainable Use of Natural Resources and Environmental Management”, by carrying out the following activities:

· Applying environmentally-sound technology;

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· Revising and enforcing related laws and regulations; · Improving welfare of local community; · Strengthening local community activity in environmental management; and · Increasing public awareness and participation.

46. Indonesian Government established Environmental Impact Management Agency (Badan Pengendalian Dampak Lingkungan: BAPEDAL) in 1990, and restructured State Ministry for Environment (Kantor Menteri Negara Lingkungan Hidup: MENEG LH) in 1993 for environmental management. Environmental Impact Assessment in Indonesia, known as AMDAL ((Analisis Mengenai Dampak Lingkungan), was amended in 1999, and the new Procedure took effect in November 2000. Criteria used to determine whether AMDAL is required for development projects in the Port Sector and Road Sector are shown in Table 2-F-1 and Table 2-F-2. General procedure of AMDAL is shown in Figure 2-F-1.

Table 2-F-1 Criteria for AMDAL Requirement (Port Development Project) Criteria of Development Project which Requires Project Type Project Description AMDAL Facility with length exceeding 200 m or area exceeding Berthing facility 6,000 m2 Port development Breakwater Length of 200 m or more project Port facility 5 ha or more Mooring buoy 10,000 DWT or more Initial dredging Dredged soil volume more than 250,000 m3 Dredging Maintenance dredging Dredged soil volume more than 500,000 m3 Reclamation More than area 25 ha or dredged soil volume 500,000 m3 Soil dumping Dumped soil volume more than 250,000 m3 Source: Revised Environmental Impact Assessment Procedure in Indonesia

Table 2-F-2 Criteria for AMDAL Requirement (Road Construction Project) Criteria of Development Project which Requires Project Type Project Description AMDAL Toll Way Construction All Size Construction Construction of Fly 2 km Over and Subway Construction Big City/Metropolitan = 10 Km Length or = 10 Ha Large and/or upgrading Medium City = 30 Km Length or = 15 Ha Large of Road with Widening in out Rural Area = 50 Km Length of Right of Way Source: Revised Environmental Impact Assessment Procedure in Indonesia

47. The major differences in the new law from the former one are strength of public participation in the assessment procedure and simplification by omission of IEE (Initial Environmental Examination). In the EIA procedure, hearings with persons (parties) concerned with the project activities are required at certain steps.

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Party with Interest in the Government Project Local Project Developer (Resident, NGO, Government EIA Committee Stakeholder) LH

Public Announcement Submission Project Plan TOR of EIA

Evaluation Reconsideration Submission Opinions, Comments, Proposal

Approval of TOR Implementation of EIA

Public Submission Preparation of AMDAL, Announcement RKL and RPL

Evaluation of AMDAL, RKL Public Hearing and RPL Reconsideration within 75 days

Submission Opinions, Comments, Proposal

Approval of AMDAL

Decision of License for Development Environmental Project Permission

Implementation of Project

Figure 2-F-1 Procedure of EIA

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CHAPTER-3 OVERVIEW OF TRANSPORT SECTORS IN INDONESIA AND THE STUDY AREA

CHAPTER-3. OVERVIEW OF TRANSPORT SECTORS IN INDONESIA AND THE STUDY AREA

48. Transport services are provided by a mix of private and state-owned enterprises (BUMNs). General outline of service provision is as follows:

Table 2-F-1 Outline of Transport Service Passenger Freight Infrastructure Dev. Road Transport Mainly private for bus Private MoSRD, PT.Jasa Marga (for services, with some BUMNs Toll road)

Railway Transport PT.KAI (Kereta Api PT.KAI (Kereta Api PT.KAI (Kereta Api Indonesia) Indonesia) Indonesia) Sea Transport PT. PELNI (excluding ferry), Mix of BUMN (PT.Jakarta PELINDO I, II, III & IV (for PT.ASDP (for ferry), with Lloyd etc.) and private commercial ports), PT.ASDP some private (for ferry port), MoC (for non- commercial ports) Air Transport Garuda & Merpati Garuda & Merpati PT.AP-I & PT.AP-II (for main (International & Domestic) (International & Domestic) airport), MoC (for the remainder) Compiled by JICA. PT.xxx means Stae-Owned Enterprise.

3-A. LAND TRANSPORT

Road

49. Roads are classified into two types: National road and Regional road. The responsibility for the construction of national road and regional road are Ministry of Settlement and Regional Development (MSRD: ex Ministry of Public Work) and regional government respectively.

50. Besides the above classification, Indonesia also has a toll road network. In 1978, the government set up PT. Jasa Marga as the state-owned highway corporation to concentrate on the construction, operation and maintenance of toll roads. Since 1986, the toll road has been listed by the Investment Coordinating Board (BKPM) as a priority sector for private participation. More than 400km of toll road is already in operation, around 70% of which was constructed by BOT.

Railway

51. The Directorate General of Land Communication within the Ministry of Communications is responsible for the day-to-day policy matters. The state-owned railway company which has changed its status to a limited liability company in June, 1999 and at the same time changed its name to PT. Kereta Api Indonesia (PT.KAI), is responsible for the operation and maintenance of the railway system.

52. In terms of cargo deposit area with the railway network, Kramatwatu deposit, Martadinata deposit, Pasoso deposit, Lemahiabang deposit, Purwakarta deposit, Gedebage deposit, and Cirebon deposit are set up in West Java. However, container volume carried by railway is small. Most containers are transported between Tanjung Priok (Pasoso terminal) and Gedebage deposit. Containers are transshipped by trucks between Pasoso terminal and JICT, Koja container terminal.

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CHAPTER-3 OVERVIEW OF TRANSPORT SECTORS IN INDONESIA AND THE STUDY AREA

3-B. MARITIME TRANSPORT

53. Currently, Indonesia has 656 public ports and 1,233 special ports. In order to improve effectiveness and efficiency of public port management, the government decided that four Indonesian Port Corporation (IPC) should manage 112 public ports on a commercial basis. The remaining 544 public ports are managed non-commercially by the government. Shipping Law stipulates some ports are open to international trade, and thus, existing classification of the port is as follows:

Table 3-B-1 Classification of Ports International Domestic Total Public Port Commercial IPC 72 40 112 Non-commercial MOC 8 536 544 Private Port 51 1,182 1,233 Total 131 1,758 1,899

54. In maritime shipping services, foreign flag ships are predominant for export/import trade, while Indonesian shipping companies are small and weak in competition due to the large number of companies (more than 1,300). Almost all major foreign shipping companies supply feeder services between Indonesia and Singapore. Ship size varies from 500 TEU to 1,000TEU. On the other hand, Indonesian flags deploy small and old ships, although some of them are now being changed to semi-container ships.

3-C. AIR TRANSPORT

55. Indonesia’s geographical feature creates a greater dependence on air transport compared to other countries in the Southeast Asia region. In total, there are around 500 airports and/or air strips, among which around 150 are administrated by three official agencies, the rest being operated by missionary organizations, mining companies and other private groups. The three official agencies are two State-Owned enterprises known as PT. Angkasa Pura I and II, and the Directorate General of Air Communications.

3-D. INVESTMENT IN TRANSPORT SECTOR

56. The trend of domestic/foreign investment is shown in Table 3-D-1. Investment in transport sector has 3-5% share to the total investment. (BKPM reports are on approval project basis and should be used as no more than an indicator of possible trends.)

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CHAPTER-3 OVERVIEW OF TRANSPORT SECTORS IN INDONESIA AND THE STUDY AREA

Table 3-D-1 Trend of Investment Billion Rp. 1998 1999 2000 2001 Inv. No. Inv. No. Inv. No. Inv. No. Domestic Investment 60,749 324 53,550 237 92,328 354 58,673 249 Manufacturing 44,908 147 46,746 126 83,060 199 43,966 133 Construction 1,992 9 395 6 843 7 2,007 7 Transport, Communication etc. 3,261 45 225 19 1,993 44 1,489 55 Others 10,589 123 6,184 86 6,432 104 11,211 54 Foreign Investment 13,563 1,035 10,897 1,164 15,413 1,508 9,028 1,317 Manufacturing 8,388 410 6,929 439 10,703 487 5,131 419 Construction 198 36 153 22 225 50 48 30 Transport, Communication etc. 79 23 103 61 1,219 61 378 86 Others 4,898 566 3,711 642 3,267 910 3,470 782 Total 74,312 1,359 64,447 1,401 107,741 1,862 67,700 1,566 Manufacturing 53,296 557 53,675 565 93,762 686 49,098 552 Construction 2,190 45 549 28 1,069 57 2,055 37 Transport, Communication etc. 3,340 68 328 80 3,212 105 1,867 141 Others 15,487 689 9,895 728 9,699 1,014 14,681 836 Source: Capital Investment Coordinating Board (BKPM)

57. During the economic crisis, the on-going and/or planned projects financed with foreign credit at that time were classified into “should be postponed”, “should be re-investigated” and “continued” by the Presidential Decree (Keppres No.39/1997).

58. Projects related to port development in the Study area can be picked up as follows:

· Postponed Projects Construction of toll road for Bojonegara-Cilegon-Labuan Reclamation of water area (375ha) in Sunda Kelapa port Development of port facilities in Cirebon port Reclamation of west water area in Tanjung Priok port · Re-investigated Projects Development of freshwater network in Tanjung Priok port Construction of 3rd container terminal in Tanjung Priok port Reclamation of east Ancol area (500ha) Construction of Bojonegara port

59. Keppres No.15/2002 was issued on March 2002 corresponding with the recent recovering economic condition in Indonesia, pushing the related Ministers to expedite evaluating feasibility and resuming the projects which were postponed and/or re-investigated in Keppres No.39/1997. The Keppres also defined the following viewpoints for evaluation work:

· Level of needs · Availability of fund · Special criteria according to the characteristic of the projects

60. Some projects in paragraph 58 have been already resumed such as construction of Koja’s new container berth, however, most projects are considered to be still under suspension. Unfortunately, the Study team has not been able to get clear picture of decision-making procedure used to greenlight projects.

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CHAPTER-3 OVERVIEW OF TRANSPORT SECTORS IN INDONESIA AND THE STUDY AREA

3-E. TRANSPORT POLICY AND PLANNING

61. Based on the PROPENAS, five-year strategic plan (RENSTRA) for transport sector was formulated and issued in May 2002. Key strategies are as follows:

· Giving priority to rehabilitation and maintenance activities of existing facilities, to maintain their capacity and quality, as well as increasing their performance. · Developing private investment opportunity for transportation infrastructure and facility. · Determining tariff system with cost recovery principle. · Introducing multi-year subsidy system. · Providing incentives for underdeveloped, isolated and border area.

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CHAPTER-4 MARITIME TRANSPORT SITUATION IN INDONESIA

CHAPTER-4. MARITIME TRANSPORT SITUATION IN INDONESIA

4-A. BASIC POLICY FOR MARITIME TRANSPORT IN INDONESIA

62. Maritime transport plays a vital role in an archipelago such as Indonesia; accordingly it should continue to be improved to support sustainable development of the Indonesian economy. In maritime transport, shipping and port are essential sectors and the policy framework for both of them is designated in Shipping Law (UU No.21/1992). Each policy for shipping and port is defined in Government Regulation (PP) and Ministerial Decree (KM) including such governmental documents as SISTRANAS, RENSTRA etc.

63. In fact, high priority is given to port development as well as to the development of national shipping in national policy, and which forms the basis of all kinds of regulations and plans/strategies.

64. The basic policy for port development is to expand port facilities and equipment to meet the future demand and hinterland potentials maintaining available capacity ahead of demand. To attain these targets, private sector participation is also introduced in the policy, with the objectives of increasing port capacity, relieving government from high investment burdens, introducing higher standards of efficiency through fair competition and expediting implementation.

65. The basic policies for shipping development are:

· To improve national shipping for both international and domestic transport services reducing the dependence on foreign shipping · To secure the availability of proper inter-island transport services to all regions especially to eastern Indonesia

4-B. KEY LAWS AND REGULATION RELATED TO MARITIME TRANSPORT

66. Key laws/regulations regarding maritime transport are described in Main Report-I. The most important government regulation is PP No.82/1999 on Shipping Operations and PP No.69/2001 on Port Affairs.

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CHAPTER-4 MARITIME TRANSPORT SITUATION IN INDONESIA

67. In August 2002, Ministerial Decree (KM No.53/2002) on “National Port System” was issued according to the Regulation PP No.69/2001 on Port Affairs. The general concept of port classification is described as follows, though it remains unclear what effect or benefit will be brought through this classification:

Table 4-B-1 Concept of Port Classification Public Port Special Port Sea Port · International Hub Port · Nation/International Special Port (Primary trunk port) · Regional Special Port · International Port · Local Special Port (Secondary trunk port) · National Port (Tertiary trunk port) · Regional Port (Primary feeder port) · Local Port (Secondary feeder port) Lake & River Port (Non classification) Ferry Port · Port for inter Province and Country · Port for inter Regency/City · Port for inside Regency/City

68. National Port System also stipulated that all ports are divided into two groups, ports open for international trade and ports not open for international trade. However, it does not mention commercial ports and non-commercial ports, nor does it clearly state the responsibility of State-Owned Corporation (IPC) as a port management body. It merely stipulates that the implementation of port affairs can be transferred from the government to a State-Owned Corporation.

4-C. SITUATION OF MAJOR CONTAINER HANDLING PORTS IN INDONESIA

4-C-1 General Description

69. Table 4-C-1 shows major container handling ports in Indonesia. While some discrepancy between DGSC data and IPC branch office data is observed among the major ports, total container throughput of the five major ports reached approx. 4.6 million TEUs in 2001, accounting for more than 80% of the total Indonesian throughput.

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CHAPTER-4 MARITIME TRANSPORT SITUATION IN INDONESIA

Table 4-C-1 Major Container Handling Port in Indonesia Container Handling Ports Name TEUs (2000) TEUs (2001) cf. Pelindo Branch Office (2000) IPC1 Belawan 311,100 358,800 Tanjung Priok 2,427,436 Total 311,100 358,800 Tanjung Perak 1,246,399 IPC2 Tanjung Priok 2,310,000 2,556,400 Tanjung Emas 266,753 Panjang 75,900 76,100 Belawan 297,546 Palembang 45,900 48,200 Makasar 146,684 Pontianak 93,100 100,800 Total 4,384,818 Total 2,524,900 2,781,500 IPC3 Tanjung Perak 1,106,900 1,268,000 Tanjung Emas 262,700 260,100 Banjarmasin 131,600 138,800 Total 1,501,200 1,666,900 IPC4 Makasar 164,700 177,500 Balikpapan 22,400 34,200 Samarinda 68,700 71,600 Bitung 66,700 80,400 Total 322,500 363,700 Batam 133,300 134,600 Others 297,900 196,800 Total 5,090,900 5,502,300 Five major Port 4,155,400 4,620,800 Share 81.6% 84.0% * Including Inter-island (Domestic) Container ** Five major ports are Tg. Priok, Tg. Perak, Tg. Emas, Belawan and Makasar. Source: DGSC

4-C-2 Port Facilities

70. Details of port facilities are shown in Main Report I.

71. With regard to container terminals, it is noted that all of them are located close to the mouth of the port, unlike those of Tanjung Priok. This should make it easier for vessels to approach. It is also noted that they provide both international and inter-island berth together at the same wharf. This means it is easy to move containers from inter-island berth to international berth and vice versa.

4-C-3 Port Activity

72. Port activities of 5 major container handling ports in Indonesia are shown below.

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CHAPTER-4 MARITIME TRANSPORT SITUATION IN INDONESIA

Table 4-C-2 Calling Vessels at the Five Major Ports Tg. Priok Tr.Perak Tg. Emas Belawan Makasar 1988 10,578 10,127 3,328 4,005 1989 10,482 10,964 3,968 4,383 1990 11,130 11,997 4,951 4,133 1991 12,106 12,826 4,323 3,873 1992 12,359 14,922 4,913 4,640 1993 12,688 14,201 5,403 4,474 1994 12,756 14,628 4,142 4,398 1995 13,094 13,453 4,629 4,231 1996 14,285 13,530 4,413 4,521 1997 15,141 13,975 4,248 4,524 1998 14,818 12,520 3,967 4,487 4,654 1999 14,706 12,593 4,561 5,455 4,852 2000 16,380 13,721 4,663 5,964 5,138 Source: DGSC, IPC

Table 4-C-3 Total Cargo Throughput at the Five Major Ports in 2000 ‘000 ton Export Import Domestic Tg. Priok 2,232 6,608 8,908 Tg. Perak 846 4,465 14,057 Tg. Emas 217 395 4,880 Belawan 2,785 1,522 6,124 Makassar 924 629 4,801

Table 4-C-4 General Cargo Throughputs at the Five Major Ports Tg．Priok Tg．Perak Tg．Emas Belawan Makassar 1991 19,095 14,919 3,529 9,593 3,737 1992 21,140 15,900 3,982 10,464 3,898 1993 23,754 18,415 5,389 9,544 4,079 1994 26,805 17,988 5,197 10,567 3,842 1995 30,937 19,484 5,551 11,717 2,420 1996 25,441 18,314 5,018 12,301 2,673 1997 28,030 23,475 6,794 11,221 2,461 1998 23,447 19,364 6,748 8,780 2,106 1999 25,223 20,079 5,954 9,397 3,925 2000 17,748 14,207 4,059 9,679 6,353 Source: DGSC, IPC

Table 4-C-5 Container Throughput at the Five Major Ports Tg．Priok Tg．Perak Tg．Emas Belawan Makassar Total 1991 736 256 57 110 16 1,175 1992 867 320 69 106 25 1,387 1993 1,054 417 72 162 48 1,752 1994 1,270 503 94 190 69 2,125 1995 1,630 580 104 191 112 2,617 1996 1,607 691 126 246 103 2,772 1997 1,909 866 158 256 137 3,326 1998 1,898 944 213 227 82 3,364 1999 2,119 1,107 231 267 126 3,848 2000 2,310 1,255 263 290 165 4,282 2001 2,251 1,268 Source: DGSC, IPC

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CHAPTER-4 MARITIME TRANSPORT SITUATION IN INDONESIA

Table 4-C-6 Passenger Movement at the Five Major Ports Tg．Priok Tg．Perak Tg．Emas Belawan Makassar Total 1988 466,272 403,095 68,703 170,506 422,641 1,531,217 1989 520,974 527,189 56,457 197,561 605,553 1,907,734 1990 506,734 551,524 111,841 195,207 654,183 2,019,489 1991 678,549 588,577 202,486 218,090 700,347 2,388,049 1992 673,998 756,461 241,158 232,804 732,552 2,636,973 1993 707,074 873,657 217,124 253,570 797,533 2,848,958 1994 731,669 979,393 313,546 221,533 773,715 3,019,856 1995 1,006,657 1,044,473 336,102 263,338 820,815 3,471,385 1996 799,681 1,043,560 315,814 215,268 752,870 3,127,193 1997 785,098 1,024,721 279,108 187,534 350,600 2,627,061 1998 921,800 1,347,392 365,499 349,847 891,712 3,876,250 1999 1,628,881 1,701,333 505,685 740,656 1,352,451 5,929,006 2000 1,545,528 1,779,298 481,327 894,757 1,258,293 5,959,203 Source: DGSC

2,000,000 Tg．Priok 1,800,000 Tg．Perak 1,600,000 Tg．Emas 1,400,000 Belawan 1,200,000 Makassar 1,000,000 800,000 600,000 400,000 200,000 0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

4-C-4 Container Terminal Operation

Major Container Terminal in Indonesia

73. There are 6 major container terminals in Indonesia as shown in Table 4-C-7. The operators of these container terminal are classified into several categories according to their relation with IPC: Joint-Venture (PT. JICT and PT. TPS); Joint operation (TPK Koja); Direct concerned operation (Subsidiary company of IPC and Branch office of IPC):

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CHAPTER-4 MARITIME TRANSPORT SITUATION IN INDONESIA

Table 4-C-7 Major Container Terminals in Indonesia Port Name of Container Operating Body Relation with IPC Terminal Belawan Belawan Container Terminal Business Unit of Belawan Container Subsidiary Company of IPC-I Terminal Tg. Priok Jakarta International PT. JICT Joint venture of IPC-II & Container Terminal (JICT) Hutchison Port Holding (HPH) Koja Container Terminal TPK Koja Joint operation between IPC-II and HPH Multi Purpose Terminal PT. Multi Terminal Indonesia (MTI) Subsidiary Company of IPC-II Tg. Perak TPS: Surabaya Container PT. TPS (Terminal Petikemas Joint venture company of Terminal) Surabaya) IPC-III & P&O Berlian Multi Purpose PT. Berlian Jasa Terminal Indonesia Subsidiary Company of IPC-III Terminal (BJTI) Tg. Emas Semarang Container Terminal Business Unit of TPKS (Terminal Subsidiary Company of IPC-III Petikemas Semarang) 2001~ Makassar Makassar Container Terminal Branch office of Makassar Branch office of IPC-IV Source: Annual Report “Year of 2000” of IPC-I ~IV, Pamphlets of each container terminal

Performance of Container Terminal

74. Facilities and equipment as well as the performance of each container terminal including Tanjung Priok are shown in Table 4-C-8. Although not all relevant data has been obtained yet, we can make the following observations:

· Berth Occupancy Ratio (BOR) is relatively low; there is still room to handle more containers. · The box/crane/hr (BCH) of approx. 20 is low compared to the international standard. It is said that 1,000 boxes should be loaded/unloaded in around 10 hours, therefore 30 BCH should be achieved assuming 3 gantry cranes are used per ship. · High Yard Occupancy Ratio (YOR) means that yard is utilized efficiently, however an extremely high figure means that it is too congested to respond to orders promptly. In addition, high YOR sometimes stems from long dwelling containers in yard, and this should be carefully investigated. Generally 70 ~ 80% is considered the maximum YOR on yard. On the other hand, low YOR means there is still enough room to handle more containers and yard can be utilized more efficiently. However, requests to move containers can be coped with more easily when the YOR is low: · Yard Dwell Time (YDT) for import container is longer than for export because of customs clearance. YDT of more than one week should be improved in order to secure the efficiency of yard operation.

22

Table 4-C-8 Container Terminal Facilities and Productivity

Major Container Terminal Facilities and Productivity in Indonesia As of end of 2002 Belawan (Gabion) Tanjung Perak Tanjung Emas Makasar (Hatta) Tanjung Priok Pelindo I PT. BJTI Pelindo III Pelindo IV Management Body /Operator PT. TPS JICT Koja CT PT. MTI (Belawan Container Terminal Unit) (Berlian) (TPKS Unit) (Branch of Port of Makasar) Inter-island (multi Inter-island (multi International & Inter-island (multi International International Type International International Inter-island International International Inter-island purpose) purpose) Inter-island purpose) (JICT I) (JICT II) Facilities Berth Length (m) 500 350 1,000 450 420 345 500 350 900/225 510 450 400 Depth (m) -11.0 -10.0 -12 & -10.5 -10.5 -9.0 -10.0 -12.0 -12.0 -11.0/-14.0 -9.0 -14.0 -8.0 Yard (m2) 94,600 30,670 290,000 90,000 2,000 77,000 114,416 369,000 92,400 207,000 40,631 (640,000) (240,000) (60,000) Ground Slot 8,931 1,944 Reefer plug (unit) 72 - 250 - - 4 36 260 68 56 CFS (m2) 11,000 10,000 4,400 9,600 4,000 - - - Handling Equipment Gantry Crane 3 (4) - 9 2 - 4 2 (3) - 10(18) 4 5(6) 2(3) Mobile Crane - - - - 5 ------Transtainer 7 29 2 8 5 31 11 21 3 Reach Stacker - 5 3 2 2 1 Spreader 9 ------Top Lifter 2 2 2 2 2 8 5 Forklift 6 12 5 9 10 Chasis 25 200 13 30 32 109 20 45 8 Head Truck 22 75 8 26 14 81 22 40 8 Productivity Throughput (TEU) 2001 221,251 n.a. 753,109 115,392 395,606 272,611 <26,604> <150,753> 1,264,231 233,345 494,121 89,315 868,501 177,357 1,497,576 2000 207,816 89,730 949,029 297,270 266,753 164,684 1,273,712 254,001 494,795 n.a. 2001/2000 (%) 6.5% - ? 8.5% 33.1% 2.2% 7.7% ? 0.7% ? 8.1% ? 0.1% - Berth Occupancy Ratio 31.1% n.a. 40.4% 37.4% n.a. 51.3% 66.0% 38.6% 56.4% n.a. Avg. Waiting Time n.a. n.a. n.a. n.a. n.a. n.a. n.a 1.2 1.5 n.a. Avg. Berthing Time 17.6 n.a. 17.5 24.2 n.a. 12.5 n.a n.a. n.a. 18.0 n.a. Avg. Effective Time 10.5 n.a. 13.2 14.5 n.a. n.a. n.a n.a. n.a. 15.6 n.a. Avg. Box/Crane/hr 19.3 n.a. 20.5 14.6 8.0 27.0 24.0 20.6 25.7 n.a. Avg. Box/Ship/hr 15.2 n.a. 26.0 12.6 n.a. 26.4 n.a 40.1 30.8 n.a. Ex: 28.1% Yard Occupancy Ratio 26.1% - 52.8% - n.a. 77.2% 75.0% 46.6% Im: 60.4% n.a. Number of Tiers 2~3 - 3~4 - 3~4 3~4 2~3 3~4 3~4 2~3 n.a. Yard Dwell Time (import) (days) 5~6 - 8~9 - n.a. 3~5 n.a 10~12 4~5 n.a. Yard Dwell Time (export) (days) 2~3 - 1~2 - n.a. 1~2 n.a 4~5 4~5 n.a. Shed Occupancy Ratio 10.6% - 53.3% - n.a. 9.2% n.a - - - n.a. Remarks Productivity data is for 2001.

* ( ) is on a basis of a short-term plan. < > is a estimated figure.

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CHAPTER-5 INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

CHAPTER-5. INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

5-A. INTERNATIONAL CONTAINER SHIPPING NETWORK AROUND INDONESIA

North American Trade

75. Table 5-A-1 shows the historical cargo movement between Indonesia and North America from 1994 through 2001. In 2000, the total volume of containers of both import and export of Indonesia/North America was 396,000 TEU which is about 3.5 % of the total Eastbound/Westbound (East Asia/North America) volume of 11,591,000 TEU.

Table 5-A-1 Container Movement between Indonesia/North America ( ‘000 TEU ) 1994 1995 1996 1997 1998 1999 2000 2001 Outbound 130 145 165 192 240 250 261 264 Growth % 8.7 11.1 13.7 16.3 25.2 4.1 4.2 1.5 Inbound 111 124 126 145 94 102 135 113 Growth % 45.9 11.6 2,1 14.8 -35.1 8.5 32.0 -16.0 Source: Piers/JOC

76. North American Trade (Trans-Pacific Route) is one of the three major battle fields of the liner shipping industry. Many shipping lines are competing in this trade. Because of many changes in the rules and regulations of governments and conferences, it has become more and more difficult to grasp the trade share of each competing line. Table 5-A-2 has been produced through a series of interviews with major shipping lines as official publications are not available.

Table 5-A-2 Top 10 Major Players in Indonesia/North America Trade in 2001 Outbound (‘000TEU) Inbound (‘000TEU) 1 Maersk-Sealand 43,400 1 APL 16,600 2 APL 39,000 2 Maersk-Sealand 16,500 3 NYK 25,600 3 Evergreen 12,500 4 Evergreen 23,000 4 Hanjin 9,100 5 Hanjin 21,800 5 Hyundai ( HMM ) 7,700 6 Hyundai ( HMM ) 15,900 6 NYK 6,600 7 OOCL 13,700 7 OOCL 6,300 8 Senator 11,300 8 MOL 5,800 9 K Line 10,400 9 K Line 5,000 10 MOL 9,800 10 Yang Ming 4,800 Top 10 Total 213,900 Top 10 Total 90,900 Source: JICA Study Team

77. It is observed that New World Alliance is exercising strong group influence over Indonesian International container market making full use of its trunk line services which are superior to other groups. On the other hand, Grand Alliance has historically been weaker than New World in the Trans-Pacific Route and this inferior background is reflected in the Indonesian shipping market. It is further observed that the Indonesian International container market consists of Trans-Pacific containers and Inter-Asia containers. The figures mentioned above include both categories as it is not possible to disaggregate them.

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CHAPTER-5 INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

European (North Continent) Trade

78. Table 5-A-3 shows the historical cargo movement from/to European North Continent from 1994 through 2001. In 2001, the total volume of outbound containers from Indonesia to European North Continental ports was 220,000 TEU. The conference members carried about 170,000 TEU (77%) and the estimated liftings by the non-conference lines were 50,000 TEU.

Table 5-A-3 Container Movement between Indonesia/European North Continent ‘000TEU 1994 1995 1996 1997 1998 1999 2000 2001 Outbound 131 164 196 187 226 215 232 220 Growth % 9.6 25.6 19.2 -4.6 21.0 -4.9 8.1 -4.5 Inbound 60 63 92 114 79 129 143 132 Growth % 14.1 5.2 44.5 24.7 -31.2 63.6 11.2 -7.7 Source: FEFC. Outbound figures include estimated liftings by the independent carriers. Remarks: Conference member lines are Hapag-Lloyd, K Line, Maersk-Sealand, MISC, MOL, NYK, OOCL, P&O Nedlloyd, APL, Senator, Yang Ming, CMA CGM, Hyundai, NSCSA at the end of 2001.

79. Table 5-A-4 shows the top 10 liner operators in the trade. This data is compiled by the JICA Study Team and not official data of the concerned conferences.

Table 5-A-4 Top 10 Major Players in Indonesia/European North Continent Trade in 2001 Outbound (‘000TEU) Inbound (‘000TEU) 1 Maersk-Sealand 34,700 TEU 1 Maersk-Sealand 30,900 TEU 2 P&O Nedlloyd 21,300 2 P&O Nedlloyd 18,600 3 APL 18,400 3 APL 14,300 4 Hapag-Lloyd 18,100 4 MOL 11,300 5 NYK 17,500 5 OOCL 11,100 6 CMA-CGM 12,600 6 K Line 10,700 7 OOCL 11,400 7 Hyundai 9,300 8 MOL 10,300 8 CMA-CGM 6,500 9 Senator 9,500 9 Hapag-Lloyd 6,400 10 Hyundai 7,300 10 NYK 5,600 Top 10 Total 161,100 Top 10 Total 124,700 Source: JICA Study Team

Inter Asian Traffic centering Indonesia

80. Table 5-A-5 shows the breakdown of Inter-Asian International movement of containers centering on Indonesia in 2001. The figures are based on the statistics return from the member lines of IADA ( Intra Asia Discussion Agreement ).

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CHAPTER-5 INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

Table 5-A-5 Indonesia/Asian Countries Breakdown in 2001 ( TEU ) Outbound Inbound Total Japan 145,800 75,400 221,200 South Korea 56,900 74,900 131,800 North China 30,100 34,700 64,800 South China 22,200 23,200 45,400 Hong Kong 61,600 33,200 94,800 Taiwan 28,600 29,500 58,100 Philippines 23,600 3,700 27,300 Cambodia 1,600 100 1,700 Vietnam 9,000 3,500 12,500 Thailand 19,400 34,800 54,200 Malaysia 30,200 19,800 50,000 Singapore 26,900 61,000 87,900 Asian Total 455,900 393,800 849,700 Source: Mitsui O. S. K. Lines Business Research Division based on Statistics of IADA.

81. About 850,000 TEU containers moved in the Inter Asia Region to /from Indonesia. Top five trade partners of Indonesia are: Japan, South Korea, China, Hong Kong and Singapore. The total container volume of the top five countries is 600,500 TEU which represents 71 % of the Asian Total.

82. In summing up, the container numbers of Indonesian International Trade in 2001 were:

East-West Trunk Line Total 729,000 TEU North American Trade 377,000 TEU European North Continent 352,000 TEU Inter Asia Region 849,700 TEU Grand Total 1,578,700 TEU

83. Throughput in 2001 was reported at around 2 million TEU. The balance of about 400,000 TEU would be caused by liftings of independent carriers in both North American Trade and European trade. Another cause could be attributed to the fact that the above grand total does not include those containers to/from European ports other than North Continental ports.

5-B. MAJOR CONTAINER HANDLING PORTS AROUND INDONESIA

5-B-1 Port Status in terms of Liners’ Calling Ratio

84. The port status of the five ports from the perspective of some major shipping lines is evaluated in Table 5-B-1. Of these five ports, Singapore is evaluated most highly, followed by Hong Kong. Port Klang is ranked as an important regional port and if operated jointly with Tanjung Pelepas, the allied ports will be able to compete with Singapore effectively. Laem Chabang is closely connected with East & South Africa through a weekly service by a shipping alliance of some major lines. The way in which Laem Chabang is being treated suggests that it may become a regional hub port in future.

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CHAPTER-5 INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

Table 5-B-1 Status of Five Ports by Major Shipping Routes Laem Tanjung Hong Kong Singapore Port Klang Chabang Pelepas North America ? ? X * * Europe ? ? ? x Other Minor Routes ? ? ? * South East Asia ? ? ? ? Inter Asia ? ? ? * Source: JICA Study Team based on various brochures and interviews Remarks ? : Strategically Important Port ? : Important Port x: Possible to skip when needed *: with some remarks

5-B-2 Port Activity (Container)

85. Container throughputs of the five ports are summarized as follows:

'000TEU Tanjung Hong Kong Singapore Laem Chabang Port Klang Pelepas 1991 6,162 6,354 1 608 - 1992 7,972 7,560 34 678 - 1993 9,204 9,046 219 772 - 1994 11,050 10,399 377 944 - 1995 12,550 11,846 529 1,134 - 1996 13,460 12,944 820 1,410 - 1997 14,567 14,135 1,105 1,685 - 1998 14,582 15,136 1,559 1,820 - 1999 16,211 15,945 1,828 2,550 - 2000 18,100 17,040 2,195 3,207 418 2001 17,900 15,571 2,312 3,760 2,049 2002 19,140 16,941 2,749 4,533 2,660 Source: Containerization International

86. Available data on transshipment container is limited to Singapore and Port Klang.

Table 5-B-2 Container Throughput in Singapore Transship Transship Overseas Local Cargo Total Cargo Ratio Management 1998 11.7 3.4 15.1 78% 1.46 1999 12.9 3.0 15.9 81% 1.72 2000 13.9 3.1 17.0 82% 2.73 Sourece: PSA Corp. Year 2001 data came from MPA.

27 THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-5 INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

Table 5-B-3 Container Cargo in Port Klang unit: TEU Transship Laden Empty Total Transship % Container 1995 986,862 146,949 1,133,811 32,614 2.9% 1996 1,216,793 192,801 1,409,594 154,147 10.9% 1997 1,452,884 231,624 1,684,508 278,619 16.5% 1998 1,466,261 353,757 1,820,018 460,809 25.3% 1999 1,960,353 590,066 2,550,419 996,090 39.1% 2000 2,551,553 776,881 3,206,753 1,350,484 42.1% 2001 2,910,305 849,207 3,759,512 1,886,745 50.2%

5-C. PERFORMANCE OF MEGA CONTAINER TERMINAL OPERATOR IN THE ASIA REGION

87. The history of international container terminal operating companies is not a long one. Table 5-C-1 shows how some of today’s companies were born.

Table 5-C-1 Background and Outline of Major International Container Terminal Operators Background Established Stocks HPH Originally a port operation division of Wharf 1994 Not listed company, the biggest and oldest Company in HK. Started from HIT (Hong Kong International Terminal) PSA Corp. Started from PSA (Port of Singapore 1997 Listed, but all Authority), a governmental organization which stocks are owned was privatized in 1996. by Government P&O Ports Started as a subsidiary company of P&O 1986 Not listed Australia, now going to be changed to P&O Ned. Group member. SSA Seattle based stevedoring company. Now 1987 Not listed quickly growing by active buying water-front companies abroad. Eurogate Two major German stevedoring companies 1999 Not listed merged to form a big company. ICTSI Some Philippine financial groups merged to 1987 Listed form an international company. APM Originally started from a terminal planning 2001 Not listed ( AP Moller division of AP Moller. After merging with Terminal ) SeaLand, the new terminal division quickly grew. CSX World When SeaLand was swallowed by Maersk, its 1996 Not listed Terminals international container terminals became independent to form CSX World Terminals. Source: Mitsui O. S. K. Lines Business Research Division, JICA Study Team

88. Of the above big companies, HPH, P&O Ports, PSA and APM are called the New Big Four. Until recently, “Big Five” consisted of HPH, P&O Ports, PSA, Eurogate and SSA, but a new formation of APM has vaulted it into the top four. Table 5-C-2 shows the leading seven container terminal operators.

28 THE STUDY FOR DEVELOPMENT OF GREATER JAKARTA METROPOLITAN PORTS –SUMMARY REPORT–

CHAPTER-5 INTERNATIONAL CONTAINER MOVEMENT AROUND INDONESIA

Table 5-C-2 International Container Terminal Operators’ Global Volumes ( million TEU ) Operators 1999 2000 2001 2001/2000 % HPH 18.0 25.3 29.0 + 14.6 PSA 17.9 19.8 19.1 - 3.2 APM Terminals 12.5 13.3 18.0 + 35.3 P&O Ports 6.2 8.3 9.8 + 18.0 Eurogate 6.3 7.0 8.6 + 22.5 SSA 3.6 4.5 6.0 + 33.3 CSX World T. N/A 3.5 3.6 + 2.9 Total 64.5 + 81.7 94.1 + 15.2 Source: Containerization International March, 2002

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