China Merchants plan to bid on the Kalibaru Port project, despite losing out on an initial construction deal.
The Hong Kong-based company that specialises in transport and management has announced intentions to join the tender for further expansion of the Indonesian seaport.
They lost out on an initial bid for the concession rights for Terminal 1 to rival company Mitsui & Co. Ltd.
The Kalibaru Port, an infrastructure project valued at US$2.5 billion, will consist of seven terminals with a total capacity estimated at 12.5 million TEU with a draft of 16 metres.
China Merchants are planning to make offers for Terminals 2 and 3 at the port.
“We think that it’s worth taking to bid for two terminals, not just one,” Jared H. Zerbe, the chief development officer with China Merchants, said during a meeting with state-owned enterprises minister Dahlan Iskan and senior executives of state-owned port operator PT Pelabuhan Indonesia II (Pelindo II) in his office in Beijing, China.
“It’s necessary for you to build new capacity (at the port) and we believe that there’s an opportunity to invest in Indonesia,” said Zerbe.
Port owners Pelindo will grant concessions for three of the seven terminals to foreign investors due to management limitations.
Speaking to the Jakarta Post, Pelindo CEO Richard Joost Lino said that they planned on “studying” how investors ran the seaport “so that Pelindo can fully manage terminals 4, 5 and 6 by itself.”
The construction of the new port in Kalibaru is expected to be a boost for Indonesia’s exports and according to Lino, shipping costs will be expected to drop by at least 40 percent.