A new oil and gas terminal will be built at Jakarta's Tanjung Priok port, Indonesia, by 2012.
A new oil and gas terminal will be built at Jakarta's Tanjung Priok port by 2012, the port's president director told on Thursday, adding that he would meet officials from the state energy firm within weeks to finalise the deal. The port in North Jakarta, run by the state-owned company Pelindo II, is Indonesia's biggest and most strategic port, handling 50 million tonnes of cargo a year.
The proposed terminal would be used to store oil products and liquefied petroleum gas shipped from other parts of Indonesia and would cut down on storage costs, Richard Lino, who took over as president director of PT Pelindo II in May, said in an interview. Lino said he would discuss the proposed oil and gas terminal with officials from state oil company, Pertamina, soon.
"We can start construction mid-next year and maybe take another two years to finish it," he said. "The government is now promoting the use of LPG in homes and so on and Pertamina doesn't have the facilities to entertain this. And the reason for the oil is that there was a big fire at a Pertamina oil storage facility close to the city recently so now they want a facility not so close to the population."
Lino, 56, said he aimed to cut $180 off the cost of transporting every 20-foot container that passed through his port by boosting efficiency.
"At this moment, if you send a 20 foot container to Europe, it costs $1000-1200 per unit. So $180 is quite a lot, if you are shipping many containers," he said.
Lino, who previously worked as a junior engineer at the port 20 years ago, said he was shocked to see the same congestion problems plaguing Tanjung Priok when he returned as president director.
Automatic customs gates will replace human-operated booths at the port and the number of booths boosted from four inbound gates to 20 and eight outbound gates to 12 by the end of 2011, he said.
He has allocated $150 million to be spent on cranes and handling equipment to cut loading times and has promised bonuses for workers if efficiency criteria are met.
"In the last customer satisfaction survey the workers got 3.5 out of 5. Next year, if they reach 3.75, they will be entitled to get another bonus," he said.
A plan to relocate depots for empty containers from the port side in north Jakarta to smaller depots in the city's east, south and west would drastically reduce the time trucks spent on the city's notoriously congested roads, he said.
"At the moment, 90 percent of the trucks you see in Jakarta traffic are on their way to or from Tanjung Priok. But more than 80 percent of the cargo is in East Jakarta," he said.
Currently, trucks drive from East Jakarta, to the port in North Jakarta to pick up an empty container, back to the East Jakarta cargo sites where it is loaded, then return to North Jakarta to put the loaded container on a ship at the port.
"Can you imagine? If we move the depot, we can cut the truck movements in half. You reduce the traffic and increase the revenue of the truck company too," he said.
Around 3 trillion rupiah ($313.8 million) had been allocated for the development of a new port at nearby Ancol, to be completed by 2014, he said.
Lino said that the port still had a long way to go to reach the standards set by some other countries.
"Indonesian logistical costs are very expensive compared to other countries. We are around number 40 in the world and Singapore is number one," he said.