ASEAN KEY DESTINATIONS
Indonesia to discuss four strategic projects with Japanese PM
The government expects to discuss the continuation of four strategic projects between Indonesia and Japan, among other topics, during the visit of Japanese Prime Minister Shinzo Abe to Indonesia on Jan. 15.
“We will talk about Patimban Port, the Jakarta-Surabaya railway, the East Natuna block with Inpex and the petrochemical and fertilizer projects,” Coordinating Maritime Affairs Minister Luhut Pandjaitan said at the State Palace on Wednesday.
He referred to the mega deep sea port project located in Patimban, West Java, as well as the semi-high speed railway connecting Jakarta and the East Java capital Surabaya, both of which are currently being discussed intensively across Indonesian and Japanese ministries.
The Jakarta-Surabaya project is part of the government’s efforts to turn the existing railway into a mediumspeed railway line with an estimated speed of 160 kilometers per hour. It might need US$2.6 billion worth of financing to complete the project.
Meanwhile, the East Natuna gas block has proven gas reserves of 46 trillion cubic feet (tcf), with estimated oil reserves of 46 million stock tank barrels (mmstb) under the gas reserves, which could produce 7,000 to 15,000 barrels of oil per day (bopd).
Patimban Port is a national strategic project that aims to ease logistics in the country. It will be located about 70 km from the Karawang Industrial Estate in Bekasi, West Java, where many Japanese industrial firms, particularly automotive manufacturers, are operating.
It will have a cargo handling capacity of 1.5 million twenty-foot equivalent units (TEUs) once it is partly completed in 2019, and then 7.5 million TEUs by 2027 — which is around half of the capacity of Jakarta’s Tanjung Priok Port — the country’s busiest port.
The investment in the port is estimated to hit US$3 billion, with around $1.7 billion expected to be covered by Japanese loans through the Japan International Cooperation Agency (JICA).
However, a detailed engineering design (DED) as well as other administrative issues must be first completed before the signing, including the provincial spatial planning (RTRW) and environmental impact analysis (Amdal).
The government has signaled that it might appoint state-owned port operator Pelindo II as the operator of the port, while it is also currently looking to appoint a Japanese company to team up with the firm. So far, two automotive titans, Mitsubishi and Astra, are reported to be strong candidates.
Transportation Minister Budi Karya Sumadi previously said the loan deal with JICA and the partnership between Pelindo II and a Japanese company could be settled during Abe’s visit.
According to the Transportation Ministry’s port director Mauritz HM Sibarani the government has yet to assign the operator, although the ministry expects to reach at least a joint declaration during the bilateral meeting.
“We have to calculate everything first,” he said.
Pelindo II corporate secretary Banu Astrini also said that as of Wednesday, there was still no decision regarding the partnership. Nonetheless, he said Pelindo II was “ready if the government assigns us to develop or operate Patimban.”
Foreign Minister Retno LP Marsudi said the Japanese delegation would also include 30 CEOs from large Japanese companies. President Joko “Jokowi” Widodo is scheduled to meet with them after meeting with Abe.
“The President will collectively meet with the CEOs to talk business matters,” she said, adding that during 2016, bilateral trade between Indonesia and Japan reached $31 billion and Japanese foreign direct investment into Indonesia reached $4.5 billion during January to September 2016.
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