Elvyn Masassya, President Director, Pelabuhan Indonesia II (IPC-Pelindo II): Interview

Interview: Elvyn Masassya

What are the investment priorities for IPC?

ELVYN MASASSYA: Our government has the ambition to make Indonesia a maritime axis, and to do this we need to develop our ports. We have plans to build several ports, not only in Jakarta, but also in other regions in Indonesia. Over the medium term, we have the new Kalibaru Port in the pipeline as well as an extension of Tanjung Priok, the Port of Jakarta. We are now reclaiming the land around Kalibaru to increase our capacity, which currently stands at approximately 7m twenty-foot equivalent units (TEUs) per year. Once we have completed the improvements, capacity will increase to around 11.5m TEUs per year. Besides Kalibaru, we have plans to build a new port near Sorong, in Papua, providing around 1.5m TEUs per year. We are also building a new port in West Kalimantan, providing 2.5m TEUs per year, as well as a port in South Sumatra, that will have a capacity of approximately 2.5m TEUs per year.

In addition to building facilities we are working with a new concept in port development. Nowadays, a standalone port is not enough to solve transport and logistics challenges, so we are aiming to build an integrated ports that will include shipping, transportation, logistics and warehousing. We are also planning on improving and using an existing canal around north Jakarta, from Tanjung Priok to Cikarang, since this is one of the largest industrial areas and a popular shipping destination. Currently, containers on route to Cikarang are transported through railways and toll roads, so we want to provide a new option through this canal. For all of these projects, we are investing around $5bn-6bn.

How does the government plan on financing port development in the country?

MASASSYA: There are several ways to meet financing demand, and we will invite investors to join. There are three areas open to investment in port development. The first avenue is through construction, the second opportunity is related to suprastructure and the third is as a terminal operator. An example of this is the partnership that we have with Hutchinson in Tanjung Priok’s Jakarta International Container Terminal. Furthermore, we can also generate financing ourselves; we plan to sell shares from some of our subsidiaries through initial public offerings, selling between 20% and 30% of each company. We can also issue bonds, as we did in 2015, or pursue conventional financing with banks.

How are port operations being modernised?

MASASSYA: We have started transforming ports operations by shifting from manual to electronic activities. Shipping lines can now register electronically, thereby improving our capacity in terms of services. We also have a plan to modernise our equipment, which will increase productivity and created what we call the new operational platform. We try to fulfil every requirement of the International Maritime Organisation in terms of safety, security and environment. Through this we believe our services, including dwelling time, will significantly improve. We have created a one-stop service for pre-clearance activity, where companies can send one document instead of sending several to different departments. The most important strategy is to simplify all processes and do everything digitally.

What are the biggest challenges for developing Indonesia’s maritime connectivity?

MASASSYA: We must be able to show international players and stakeholders, such as shipping lines, that Indonesia can provide the best in terms of ports. To achieve this we need to increase our capacity and improve our processes in order to attract more transshipment to our ports. The other main challenge is the lack of connectivity with roads, railways and other infrastructure developments around the ports. To fill these gaps we have to work with other companies, but it takes time to solve problems such as land acquisition, which remains a bottleneck for infrastructure development.