Investing in Indonesia’s
seaports sector
An overview of opportunities, capabilities
and provisions
Version: December 2015
© 2015 by Indonesia Investment Coordinating Board (‘BKPM’). All rights reserved
Contents

An introduction
3

Why Indonesia?
4

Seaport sector overview
5

Market opportunities
6

Existing and future capabilities
23

Government provisions and support
31

Good reasons to invest in Indonesia’s seaport sector
37
The Investment Coordinating Board of the Republic of Indonesia
2
Introduction
The Government of Indonesia aims to establish a “maritime toll road” as part of its strategy to
connect all of its islands from Sumatera to Papua in order to improve logistics, reduce inflation
and create a greater impact on economic prospects for the Indonesian people.
The concept of a “maritime toll road” is to implement a sea transportation network across the
Indonesian archipelago by using large sea vessels from Belawan (Sumatera) right across to the
Eastern part of Indonesia in order to maximize economic connectivity.
This ambitious programme offers abundant opportunities for foreign investors.
Source: Badan Kordinasi Penanaman Modal
The Investment Coordinating Board of the Republic of Indonesia
3
Why Indonesia?
MARKET
OPPORTUNITIES

The Government of Indonesia
plans to build 24 new seaports,
270 ferry ports and 104 pioneer
vessels.

Efforts to increase fishery
products, improve fishery ports
and increase sea conservation
areas across the country.

EXISTING & FUTURE
CAPABILITIES


65 locations for industrial
estates, 8 Special Economic
Zones and 4 Free Trade Zones.

Source: CMEA, BKPM
Government will spend IDR 498
trillion on sea transportation.
State Owned Enterprises (SOEs)
will spend IDR 238.2 trillion for
this purpose and IDR 163.8
trillion will be sought from the
private sector from 2015-2019.
Currently there are 4 SOE port
operators in Indonesia : PT
Pelindo I-IV and private
operators in Indonesia. In total.
there are 10 port operators in
Indonesia.
Total passenger flows and
container flows are on the rise.
Sources: Ministry of Transportation
GOVERNMENT PROVISIONS
& SUPPORT

Foreign seaport companies
which provide harbor facilities
can now have 95% ownership
(up from 49%).

Multimode of transportation
business is now open with up
to 49% foreign ownership. This
represents progress since it was
not previously open

The recently issued and
improved Presidential
Regulation No.38/2015
regarding PPP in infrastructure.
Sources: BKPM, CMEA
The Investment Coordinating Board of the Republic of Indonesia
4
Seaports Overview
ASEAN’s Logistic
Performance Index
2010-2014
Current number of
seaports and future
plans
Number of airports
compared to seaports
Singapore: 4.00
Malaysia: 3.59
Thailand: 3.43
Indonesia: 3.08
The Philippines: 3.00
Current seaports (44) New seaports (24)
Current airports: 39 Current seaports: 44
Source: World Bank
Source : Ministry of Transportation
Source: Ministry of Transportation
According to the World
Bank, Indonesia ranks in
the middle among other
ASEAN countries with an
improvement from 2.94 to
3.08.
Indonesia currently has 44
seaports across the
country.
The 24 new planned
seaports hows the serious
intention of the GoI in
advancing the maritime
toll road in the next five
years and connecting the
archipelago through an
ambitious logistics plan.
The Government of
Indonesia is to establish 24
new seaports from 20152019 across the country.
The Investment Coordinating Board of the Republic of Indonesia
5
SECTION DIVIDER SLIDE
SECTOR-RELEVANT IMAGE TO BE INSERTED
Market Opportunities
© 2014 by Indonesian Investment Coordinating Board. All rights reserved
Indonesian Seaport : The Push Factors
World’s largest
archipelago country
17,000 islands
3,500 miles wide
Sources: Bappenas
Indonesia’s vast size provides
huge maritime business
opportunities for foreign and
domestic investors in
Indonesia.
The Government has
pledged to improve logistics
within the country between
2015-2019.
Home to the world’s
22nd busiest seaport
in 2013 with volume
of 6.59 million TEUs.
Source: IMF
Indonesia features among the
locations with the world’s top 25
busiest seaports. Tanjung Priok
Port in Jakarta ranks 22nd globally
The traffic of goods between
Asia and North America and
North Europe had a total of 36
million TEUs in 2012.
Indonesia is the world’s
17th largest GDP with US$
856 billion and a per
capita income of US$
3,587. Its trade activity is
getting stronger.
Source: World Bank
The Government of
Indonesia is improving its
trade policies and pushing
exports to major economic
spots in Asia, Australia, North
America, Central America
and Middle East.
The Investment Coordinating Board of the Republic of Indonesia
7
Sector Trends : Passengers for Sea Vessels
Passenger trends
7.63%
Annual
Average
Growth
Year
2008
2009
2010
2011
2012
2013
2014
Number of
passengers
(million)
6.16
5.94
7.1
6.08
6.18
8.9
13.1
•
Indonesians still use sea transport extensively, especially during holiday periods like religious
celebrations and school holidays. During holiday seasons many people use sea transportation
to go back to their home towns. Sea transport is still more affordable than flying.
•
The figure went down in 2011 due to a restriction from Ministry of Tranport on old vessels
which were no longer seaworthy. The number of sea passengers has since recovered
however, with a significant increase in 2013-14
Source: BPS, Ministry of Transport
The Investment Coordinating Board of the Republic of Indonesia
8
Sector Trends : Cargo for Sea Vessels
Cargo trends
16.87%
Average
Growth from 2011-2013
Year
2008
2009
2010
2011
2012
2013
2014
Number of
cargo in
million tons
162.5
146.9
109.3
156
176.1
225
216.7
•
Transporting cargo by sea is still dominant in Indonesia due to low costs and the
ability of the vessels to reach distant islands across the archipelago.
•
The figures have fluctuated due to fuel price fluctuations and several shipping
companies still choose airplanes for faster delivery to certain regions in Indonesia.
•
Going forward, the outlook for sea cargo remains promising however.
Source: BPS, Ministry of Transport
The Investment Coordinating Board of the Republic of Indonesia
9
A Glimpse of Seaport Industry in Indonesia
Port Operators in
Indonesia
Trade and
Movement of Goods
Main Ports in
The Country
Total Passengers in 2014:
13.1 million people
Total of cargo in 2014:
216.7 million tonnes
Main Ports in Indonesia:
Belawan, Tanjung Priok,
Tanjung Perak,
Makassar and
Balikpapan.
Source: Ministry of Transport,
PT SMI
Source: Ministry of Transport,
PT SMI
Source: Ministry of Transport,
PT SMI
The above major ports
cover the majority of
movement of goods and
people from the Western
part of the country into
the Eastern part of the
country.
There are 4 State Owned
Company of port
operators in Indonesia
from Sabang to Merauke
and a total of 10 port
operators existing in the
country. Private
companies can operate
ports in Indonesia.
With the anticipated
consolidation of the AEC
moving into 2016 and
beyond, Indonesia will
experience a surge in
trade activties and
movement of people by
sea transportation.
The Investment Coordinating Board of the Republic of Indonesia
Four State-OwnedCompany Port
Operators: Pelindo 1-4
and other private port
operators. Currently
there are a total of 10
port operators in
Indonesia.
10
Infrastructure Ratings of Indonesian Ports & Infrastructure
Global Competitiveness Index
Port Infrastructure rating
No.
Year
Indonesia Rating
1.
2011-2012
103/142
2.
2012-2013
104/144
3.
2013-2014
89/143
Country
Switzerland
Singapore
Finland
Germany
United States
Malaysia
Brunei
Thailand
Indonesia
Philippines
Vietnam
Ranking
1
2
3
4
5
24
26
37
38
59
70
Indonesia has improved its position in the Wold Economic Forum’s Global
Competitiveness Index, reaching number 38 in 2013-2014, an improvement from number
50 in 2012-2013. The overall Infrastructure sector has also increasing its rating from number
78 in 2012-2013 to number 61 in 2013-2014.
Indonesia’s port infrastructure rating has also improved considerably - from number 103 in
2011-12 to 89 in 2013-14.
Source: WEF Global Competitiveness Report 2011-2014
The Investment Coordinating Board of the Republic of Indonesia
11
MP3EI*- Master Plan for Economic Expansion in
Indonesia for Ports
•
The projected investment for MP3EI is IDR 4,000 trillion and based on that amount 44%
(or IDR 1,774 trillion) will be allocated in infrastructure - 6% of which (IDR 117 trillion) will
be allocated to sea port development.
•
In line with President Joko Widodo’s priority to develop areas outside Java, the
indication are that 46% of the total investment for port developments will be in
Sumatera and 35% for Kalimantan.
*MP3EI: Master Plan for Acceleration and Expansion of Indonesian Economic development
The Investment Coordinating Board of the Republic of Indonesia
12
Indonesia’s Main Ports
•
Tanjung Priok Jakarta is the biggest and busiest port in Indonesia, Tanjung Priok’s capacity is
increasing gradually from 5.62 million TEUs in 2011 to 6.2 million TEUs (8.5% growth). During the past
10 years the container throughput in Tanjung Priok port has increased three times from 2.4 million
TEUs to 6.2 million TEUs.
•
During the past five years, container throughput in Port Tanjung Perak grown 1.5 times from 1.5
million TEUs to 2.9 million TEUs close to the total capacity of 3.01 million TEUs.
•
The Port of Belawan provides major facilities including: a liquid bulk terminal, dry bulk terminal,
cargo load/unload container, passenger terminal, navigation services, space and warehousing
services within the port area. The Port of Belawan along with other ports in Sumatera will be
revitalized into international hubs.
•
Container flow in Makassar Port reached 11.4 million tons in 2013 .
The Investment Coordinating Board of the Republic of Indonesia
13
Potential Seaport Project: New Tanjung Priok Port
Project profile: The construction of a new port - an extension of Indonesia's
.busiest port, Tanjung Priok - is one of the biggest public projects currently in
.development in Indonesia. The Tanjung Priok harbor in North Jakarta which
.handles more than half of total goods that are exported from or imported to
.
Indonesia has however become overloaded over the years. The New Priok
project will bring Indonesia's port facilities on par with other world-class
ports
Projected value of investment:
Phase 1: US$ 2.47 billion, Phase 2: US$ 1.50 billion
Government contracting agency: Ministry of Transport & Pelindo II.
The Investment Coordinating Board of the Republic of Indonesia
14
Potential Seaport Project: New Tanjung Priok Port
When the whole project is
completed, Jakarta's
Tanjung Priok Port will
increase its annual capacity
from five million twenty-foot
equivalent units (TEU) of
containers to 18 million TEU
and will be able to facilitate
triple-E class container ships
(with a 18,000 TEU capacity)
in a 300 meter-wide twoway sea lane.
.
.
.
.
Tanjung Priok was originally
designed to handle five
million TEU of container
traffic per year. In 2011,
however, container traffic in
this harbor reached 5.8 TEU,
indicating the necessity to
expand its infrastructure.
The Investment Coordinating Board of the Republic of Indonesia
15
Potential Seaport Project: Expansion of Cargo Terminal at
Belawan, North Sumatera
Project profile: The terminal will improve its capacity from the current 1.2 million TEUs to
2.2 million TEUs/year (or an 83% increase). It will involve the construction of a 350 m pier,
a causeway and stacking yard with a capacity of 400,000 TEUs. The harbor draft will also
be
. deepened to enable 5,000 TEU capacity vessels to enter the port. The Belawan port is
being envisioned to become the country’s main logistics gateway to compete with
neighboring Singapore and Johor Baru in Malaysia.
Projected value of investment: US$ 230 million
Government contracting agency: Ministry of Transport & Pelindo I.
The Investment Coordinating Board of the Republic of Indonesia
16
Potential Project: Development of Kuala Tanjung Port,
North Sumatera
Project profile: Once all the four stages are completed in 2019, the Kuala Tanjung Seaport will have
a 3.5 million ton of wet and one million ton of dry bulk capacity terminals, a 400,000 TEUs per year
container terminal, and a new 400-meter-long pier. The first stage of the Kuala Tanjung Seaport
project will be completed in 16 to 18 months with the development of a 400-meter-long pier, utilities
and equipment will be set up, and information technology installations will be made.
The
. second stage of the venture will include the development of a 10-hectare stacking yard and a
1,000-hectare industrial zone. While improving transshipment activities, such as loading and
unloading, from Kuala Tanjung to other ports in the world will be part of the third stage, the president
director explained that the fourth stage will include transforming Kuala Tanjung into a city port.
Projected value of investment: US$ 2 Billion.
Government contracting agency: Ministry of Transport & Pelindo I.
The Investment Coordinating Board of the Republic of Indonesia
17
Potential Project: Development of Tanjung Perak Port,
East Java
Project profile: The existing port of Tanjung Perak has been consistently operating over its
general cargo capacity of 3.57m tonnes per year, with volumes reaching more than 7m
tonnes in 2012. The first phase of the new Teluk Lamong terminal, which began
construction in 2010, will encompass a 500-sq-metre international yard, 450-sq-metre
domestic yard, a 10-ha dry bulk yard and a 15. 86-ha container storage yard. The
.
second phase of the project is planned to start in 2016 and is set to include
development of a further 50 ha.
Projected value of investment: US$ 250 million.
Government contracting agency: Ministry of Transport & Pelindo III.
The Investment Coordinating Board of the Republic of Indonesia
18
Potential Project: Development of Bitung Port,North
Sulawesi
Project profile: Until the end of 2014, stevedoring traffic in Bitung Port has reached
200,000 TEUs or a 37.93-percent hike year on year. If vessel traffic from eastern Indonesia
increases the stevedoring will exceed 20% in this year. The existing Bitung container
yard utility rate has reached more than 80% so container traffic is too crowded. Ideally,
the container yard utility rate should be around 60%. The first phase of 65-meter berth
.
expansion has been conducted which will be followed by another 65-meter expansion
project in this year.
Projected value of investment: US$ 500 million.
Government contracting agency: Ministry of Tranport & Pelindo IV.
The Investment Coordinating Board of the Republic of Indonesia
19
Potential Project: Development of Makassar, South Sulawesi
Project profile: According to the firm’s business plan, Pelindo IV will construct a port with
capacity for between 250,000 and 300,000 twenty-foot equivalent units (TEUs) in the first
phase to help support the existing Soekarno-Hatta Port in Makassar. The firm has
prepared a 106 hectare site for Makassar New Port’s container terminal and another 106
hectares for a multipurpose terminal. It has also prepared an 11.92 hectare area for
warehouse facilities and an industrial zone that will support logistics at the port, given
that
Makassar is the logistics hub for transshipment in the east, along with East Java’s
.
Tanjung Perak Port. In the first phase, the port will be built with a draft of 14 meters and a
320 meter dockyard in order to allow large vessels, such as the Panamax and PostPanamax, to enter.
Projected value of investment: US$ 421.55m.
Government contracting agency: Ministry of Transport & Pelindo IV.
The Investment Coordinating Board of the Republic of Indonesia
20
Future Opportunity : Indonesia Shipping & Shipyard Industry
Fact: Indonesia has more than 100 commercial and small ports, many of which can only serve
quite small vessels on domestic runs and there are only a few which have container facilities. The country has a
shortage of large ports with capability to serve trans-oceanic ships and the result is Tanjung Priok port has been
burdened with the large number of Indonesia’s exports and imports (about 67%). The port is currently
handling 5 million TEUs a year compared to Singapore’s ability to serve more than 31 million TEU.
Indonesia is also facing increasing demand for domestic shipping. In 2005 the number of vessels was
6,041 and in 2013 the number had increased to12,536. The rising number of vessels has tripled the total volume
capacity from 5.67 million GT in 2005 to 17.89 million GT in 2013.
The country has 200 shipyards. It has a combined annual new-building capacity of 800,000 dead weight tonnes
(DWT) and maintenance capacity of 10 million DWT.
Opportunity: Batam-Bintan-Karimun FTZ is developing into a shipbuilding center. In shipping, while
Foreign ships are prohibited in the domestic shipping, a local presence or participation of local companies
allows investors to capitalize on the large demands of transporting people and goods across the world’s largest
archipelago.
Source: INSA, GBGinvestments
The Investment Coordinating Board of the Republic of Indonesia
21
SECTION DIVIDER SLIDE
SECTOR-RELEVANT IMAGE TO BE INSERTED
Existing and Future Capabilities
© 2014 by Indonesian Investment Coordinating Board. All rights reserved
Key universities and institutes
Maritime Academy of Jakarta
http://www.stipjakarta.ac.id
Sekolah Tinggi Ilmu Pelayaran (Maritime Higher Education Institute) is
a state owned maritime institution administered under the Indonesian
Ministry of Transportation. It was founded in 1953, in the name of
Akademi Ilmu Pelayaran (Merchant Marine Academy) running a 3 - 4
year program of Diploma III (equal to Bachelor Degree) majoring in
Nautical and Technical Departments with Class III Certificate of
Competence.
Business Maritime Academy at Semarang, Central Java
www.akpelni.ac.id
It was founded in 1964 and offers Diploma III in maritime, vessel
engineering, port and merchant maritime. In 2001 the Academy
received ISO certification from QAS Limited Australia.
Maritime Academy of Yogyakarta
www.akademimaritim.com
The academy provides D3 curriculum in merchant maritime and port
studies as well as working with private companies for apprenticeship
and job placements for its students and graduates.
The Investment Coordinating Board of the Republic of Indonesia
23
Key State-Owned Enterprises (SOEs)
Established in 1945, PT Pelindo I was under the Dutch
management until 1951. From 1960 it became a State Owned
Company (SOE) and is still under the mangement and supervision
of Ministry of State Owned Enterprises. This company manages
Nanngroe Aceh Darussalam, North Sumatera, Ria and Ria Islands.
The company’s website is: www.inaport1.co.id. The Headquarter’s
office is in Medan, North Sumatera.
Established in 1960, PT Pelindo II was established in 1960. The
company was under the management of the Ministry of State
Owned Enterprise in 1998/1999. It manages 12 ports in 10
provinces (West Sumatera, Jambi, South Sumatera, Bengkulu,
Lampung, Bangka Belitung , Banten, DKI Jakarta, West Java and
West Kalimantan). It also owns and supervises The Jakarta
International Cargo Terminal at Tanjung Priok. The company’s
website is: www.indonesiaport.co.id. The company’s HQ is in
Jakarta.
The Investment Coordinating Board of the Republic of Indonesia
24
Key State-Owned Enterprises (SOEs)
PT Pelindo III was established in 1960 and in 1992 the company
was under the management of Ministry of State Owned
Company. It manages 43 ports in 7 provinces such as in East Java,
Central Java, South Kalimantan, Central Kalimantan, Bali, West
Nusa Tenggara, East Nusa Tenggara and other 7 subsidiaries. The
company’s website
is: www.pelindo.co.id. Pelindo III’s
Headquarters is in Surabaya, East Java.
Created in 1957, Pelindo IV is the main engine for the growth,
trade and development for eastern Indonesia. The company in
1960 was under the Government of Indonesia’s ownership,
previuosly from Dutch government. In 1992 the company became
a State Owned Company and is still under the management and
supervision of the Ministry of State Owned Companies. PT Pelindo
IV manages and owns ports in the eastern part of Indonesia such
as in East Kalimantan, North Sumatera, South Sumatera, Central
Sulawesi, West Sulawesi, Ambon and Papua. Its HQ is in Makassar,
South
Sulawesi.
The
company’s
official
website
is
www.inaport4.co.id
The Investment Coordinating Board of the Republic of Indonesia
25
Existing key foreign companies (1)
Website : www.vale.com
Vale has been managing 2 ports in
Indonesia and investing at those 2
ports as well.
Located in Balantang, a village in the
province of South Sulawesi, this port
has two different docking facilities with
a total capacity of 6,000 DWT. Vale’s
stake: 59.3% – operated in partnership
with Sumitomo and public investors.
Located in the village of Lampia, also
in South Sulawesi, this port has
mooring buoys that can
accommodate ships of up to 20,000
DWT, and a terminal that can service
tanker vessels of up to 2,000 DWT,
providing total capacity of 22,000
DWT. Vale’s stake: 59.3% – operated
in partnership with Sumitomo and
public investors
Website : www.jict.co.id
JICT covers a total of 100 hectares and is the largest container
terminal in Indonesia. JICT handles more than 2.2 million TEUs
(Twenty foot Equivalent Units) per year and is strategically located
at the industrial heartland of West Java.
JICT is owned by Hutchison Port Holdings (HPH), a subsidiary of the
multinational conglomerate Hutchison Whampoa Limited (HWL), is
the world's leading port investor, developer and operator.
From 2008-2013 JICT invested more than US$ 151 million for system
upgrading and increasing the capacity of its human resources.
Pelindo II’s cooperation with HPI in JICT has been conducted since
1999. Following the investment, stevedoring capacity in JICT
increased from 1.4 million TEUs to 3 million TEUs in 2013. JICT also
keeps increasing the investment to improve its service through the
implementation of new technology, human resources quality
improvement, and new equipment procurement. From 2008-2013,
the total investment disbursed by JICT reached USD 151 million.
In 2014, JICT announced an additional investment of USD 40 million.
The budget will be used for procuring equipment and building a
new entry gate – namely an automatic gate system (AGS)
connected with JORR which will be built in the port.
The Investment Coordinating Board of the Republic of Indonesia
26
Existing key foreign companies (2)
Website : www.tpkkoja.co.id
Website : www.pt-pp.com
The growth of Indonesia in early 1990s
has led to increase of export and
import activities through Tanjung Pirok
port. The existing two container
terminals were no longer able to
handle the massive volume of
containers.
PT Pembangunan Perumahan
(PP) is a state-owned company
established in 1953. In 2010 the
company invested a 20% stake
or a IDR 4 trillion of value for the
expansion of Tanjug Priok port
phase 1.
In order to meet the steeply rising
demand form container handling
services, the state-own company, PT
Pelabuhan Indonesia II (Persero) in
cooperation with private company, PT
Hutchison Ports Indonesia, jointly
developed
a
completely
new
terminal, the Koja Container Terminal
(Terminal Petikemas Koja – TPK KOJA)
Another investment of IDR 8.1
trillion was made in 2012 at
Tanjung Priok port showing that
Tanjung Priok port is expanding
and it meets the investment
appetite from the domestic
and foreign investors.
These two companies have also
formed a Joint Operation (JO) to
handle the daily operations of
terminal. TPK Koja plans to invest US$
206 million in the next 6 years to
improve port handling efficiency.
The Investment Coordinating Board of the Republic of Indonesia
27
Key Associations
Indonesia Port Corporation / Asosiasi Badan Usaha Pelabuhan Indonesia (ABUPI)
or the Port Corporation Association is a forum for Indonesian businessmen/women
and also serves as the primary organization for corporation and
businessmen/women who are doing business in port: Port Corporation (BUP),
Special Terminal (TerSus) and Port for Internal Use (TUKS).
ABUPI was established with the objectives to support and assist government’s
endeavor to improve economic development in the Maritime sector as well as to
support and ease the members’ activities
Website : www.abupi.org
Asosiasi Logistik Indonesia was established in 2002, Indonesian Logistics Association.
ALI is a non profit organization for the Supply Chain & Logistics profession in
Indonesia. ALI is open to Indonesian citizens who work as practitioners,
academicians, regulation makers, or observers in the field of supply chain & logistics
management. ALI's membership is individual. ALI was opened to public membership
in January 2003. As per December 2009, total number of members registered
reached more than 3,000 professionals consisting of practitioners, academicians,
regulators, and those who have interest in this field. The practitioners came from
various industries, namely manufacturers, logistics providers, distributors, traders,
retailers, Oil & Gas, and many more
Website : www.ali.web.id
Indonesia National Shipowner Association (INSA). INSA is a organization that is
tasked to enhance national shipping at both in Indonesia and other countries. It
has 57 members from ASEAN member countries, Asia and other international
organizations and countries which are interested to strengthen ties in trade and
shipping with Indonesia.
Web site: www.insa.or.id
The Investment Coordinating Board of the Republic of Indonesia
28
Benchmarking ASEAN-5
The chart below presents the Financial Times’
analysis of the average total labour costs for
a engineering services operation. The costs are
based on a head count of 42 across 6 different
job functions (see the table below for the unit
cost per profession). The salary levels used in
these results are the average range base salary
levels for these locations.
Labour Costs (US$)
1.2m
1.14m
1.66m
1.73m
Thailand
Malaysia
1.22m
Indonesia has the 2nd lowest total labour
costs at US$ 1.2m per annum.
Vietnam
Labour Costs (US$)
by profession
Assistant Engineer
Chemical Engineer
Civil engineer
Engineering Manager
Industrial engineer
Secretary
Indonesia Philippines
Vietnam
Indonesia
Philippines
Thailand
Malaysia
6,180
39,150
28,200
80,870
28,200
3,920
8,630
37,050
29,300
81,100
29,300
4,680
9,000
36,490
30,000
78,680
30,000
6,340
11,970
53,800
39,900
101,700
39,900
7,930
13,160
51,940
41,800
93,700
41,800
9,900
Source: fDi Benchmark, a product of the Financial Times, June 2014
The Investment Coordinating Board of the Republic of Indonesia
29
SECTION DIVIDER SLIDE
SECTOR-RELEVANT IMAGE TO BE INSERTED
Government Provisions and Support
© 2014 by Indonesian Investment Coordinating Board. All rights reserved
Investment Climate Improved in 2015
Land Acquisition Improved
Law No.2/2012 and
Presidential Regulation No.
71/2012 will ease land
acquisition bottlenceks and
disputes for infrastructure
projects such as road, railway,
station, seaport, airport,etc.
The Law and Regulation
stipulate clear timeframe for
land acquisition, clarity over
land appraisal, funding and
amount and types of
compensations, objections
and dispute settlements.
The land for PLTU Batang,
Central Java has been
cleared due to the the new
Land Acquisition Law
No.2/2012.
One Stop Shop at BKPM
Indonesia Investment Coordinating
Board (BKPM) has integrated
Numbers of licenses previously
handled by Various Ministries and
Agencies in the field of electricity,
maritime, Tourism, education and
agriculture.
22 line Ministries and Government
Agencies have placed their staffs
Permanently at BKPM’s office to
Assist the investors in applying for
licenses.
Now the investors need only to
Come To BKPM’s office to apply for
business licenses.
PPP Regulation Revised
The new Presidential Regulation No.
38/2015 Regarding the cooperation
of Government with Enterprises in
infrastrcuture has just been revised
and issued on 20 March 2015.
There are some improvements in
This revised regulation, namely:
a. The involvement of the head of
local government in this
infrastructure project.
b. The fund for land acquisition can
originate from State Budget/
Local Budget.
c. The fund from land acquisition
can originate from State Owned
Enterprise or Local Govt
Enterprises.
d. The Central Government can
Issue government guarantee on this
infrastructure project.
The Investment Coordinating Board of the Republic of Indonesia
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Regulations in Indonesia Seaport
1.
Law No 17/2008 on shipping has increased the scope for competition between ports by removing
the monopolies of the four state-woned Indonesian Port Corporations (IPC 1, IPC 2, IPC 3 and
IPC 4). The Law opens up the industry by allowing private port facility operators and port service
providers.
2. National Ports Master Plan establishes the Regulatory Framework and sets goals for Indonesian
port development until 2030, envisioning the construction of dozens of national ports and
hundreds of smaller feeder ports.
3.
Presidential Decree No. 39/2014 on Negative Investment List, allows for foreign capital ownership
in the supply of port facilities- formerly capped at 49%- to reach a maximum of 95% within PPP
schemes during the concession period. This includes the supply of piers, buildings, container
and bulk terminals and Ro-Ro terminals. Outside of the PPP structure, the 49% cap on foreign
direct investment remains in place.
4.
Government Regulation No.22/2011 allows exemptions from the cabotage principles with regards
to transportation services for the offshore oil and gas industry, where Indonesia still depends
heavily on global companies.
5.
Law No. 2/2012 regarding land acquisition expedites the land procurement process thereby
removing what used to be a major stumbling block for PPP.
The Investment Coordinating Board of the Republic of Indonesia
32
Role of Private Sector and Government in Indonesia’s Seaports
Private Sector
Design, engineering,
construction, commissioning
and procurement of seaport
Project in Indonesia.
Provide substantial financing
As well for the seaport
Project i.e expansion or
Development in Indonesia.
Government
Investor
To support in land acquisition
and land access rights, thereby
alleviating what is arguably
the most daunting aspect for
private investors.
Government can also extend
to construction where deemed
Necessary. It can provide
Contingent guarantees to
mitigate low demand or
Unfavorable shifts in the political
environment.
The Investment Coordinating Board of the Republic of Indonesia
33
Financial support
To assist in the acceleration of infrastructure development and
provision of infrastructure financing, the Government has created two
key institutions:
 PT Indonesian Infrastructure Guarantee Fund
 PT SMI (Sarana Multi Infrastruktur)
IIGF was established end 2009 as a Single Window in providing
guarantees for infrastructure projects Mandate: to provide guarantees for
Government Contracting Agencies’ (Ministry, Regional Government, SOE)
financial obligations under PPP Agreement for infrastructure projects with
Private Company. IIGF is 100% MoF owned SOE.
www.iigf.co.id
PT SMI (Sarana Multi Infrastruktur), which is 100% owned by the Ministry
of Finance, provides mezzanine , equity financing,fund and guarantee for
infrastructure projects in rupiah.
www.ptsmi.co.id
The Investment Coordinating Board of the Republic of Indonesia
34
Key Public Institutions
Directorate General of Sea
Transportation , Ministry of
Transportation
The Government Ministry
responsible for the governance
and regulation of airport in
Indonesia. The Ministry is
located in Jakarta.
www.dephub.go.id
Directorate of Infrastructure,
National Development Planning
Agency (Bappenas)
The Ministry in charge of
Indonesia’s national development
planning matters, including
infrastructure development.
www.bappenas.go.id
KPPIP-Committee for acceleration
Of Priority infrastructure delivery
At the Coordinating Ministry of
Economic Affairs.
This newly established committee
is tasked by President Joko Widodo
in accelerating infrastructure priority
projects in Indonesia. It is chaired by
Coordinating Minister of Economic
Affairs with members such as
Minister of Finance, Head of
Bappenas, and Minister of Agrarian
and Spatial Planning.
www.ekon.go.id
The Investment Coordinating Board of the Republic of Indonesia
35
Six good reasons to invest in Indonesia’s seaport sector
Large opportunities
across the entire
seaport supply chain
Ongoing and upcoming
projects covering feasibility
studies and construction to
improvement of seaport
facilities and services.
A growing and
profitable sector
PT Pelindo I booked profit of
IDR 585 billion, PT Pelindo II
booked profit of IDR 2.1
trillion, Pelindo III booked profit
of IDR 1.2 trillion and Pelindo
IV booked IDR 530 billion in
2013.
Growing pool of
qualified labour in SE
Asia
An ambitious seaport
development/revitalization
program worth more than
Beyond having the largest
pool of workers, Indonesia has
the 2nd lowest labour costs for
engineering services in the
ASEAN-5
To develop and improve the
Indonesian ports. Plans
include grading the existing
airports and establish more
commercial and noncommercial seaports.
Source: fDi Benchmark (Financial Times)
US$ 9 Billion
Large and various
sources of funding
(public and private)
Indonesian Government,
International development
banks, and fully private funds
are involved in seaport
projects (passenger and
freight)
A Government
committed to
supporting seaports
One of the priorities of the
Government of Indonesia
through Ministry of
transportation is for seaport
development
The Investment Coordinating Board of the Republic of Indonesia
36
BKPM international representative offices
(Investment Promotion Centre):
Invest in...
For further information, contact us at:
Kantor Representatif EU DESK di
BADAN KOORDINASI PENANAMAN MODAL (BKPM)
REPUBLIK INDONESIA
Jl. Jend. Gatot Subroto No. 44, Jakarta 12190, Indonesia
P : +62 21 5274 803
E : [email protected]
[email protected]
W : www.bkpm.go.id
www.euind-tcf.com/eudesk/
This presentation has been developed with the
support of:
The European Union (EU) Desk at BKPM, part
of EU-Indonesia Trade Cooperation Facility
(TCF) projects.
© 2015 by Indonesia Investment Coordinating Board (‘BKPM’). All rights reserved