Seventh Symposium (Presentation of Tanjung Perak : Tanjung Perak Indonesia Port Corporation III）

PORT OF TANGJUNG PERAK'S ALTERNATIVES TO FACE COMPETITION in GLOBALISATION ERA : The Goal for Sister Ports and Hub Port

The zone of global free trade will come into effect in 2010 so whether we are ready or not we are going to enter the era called Globalization in which there will be no more monopoly by anyone applied on our segments of life. It is also concerned with single market formation because of united markets in the world. Trade obstacles, like quotas and protections, will be completely removed and Multi National Corporations having competitive capability are able to do unhampered marketing of their products to other countries.

Therefore, the 7th symposium of International Network of Affiliated Ports (INAP) 2005 held in Colombo, Srilanka, is an appropriate medium for discussing two interrelated questions. Those are, how each port as a member of INAP is able to enhance its productivity facing global challenges, and as well as to make INAP producing more useful results to all of the members.

Facing globalization, every country has a different strategy depending on its capability and condition, which it could be characterized in different types such as advanced countries, or underdeveloped ones. Ports, one of the most important facility in a country, also face global challenges which it makes all of port managements strive hard for finding the best and most valuable way for surviving in strictly competitive atmosphere. One of the short-term programs is increasing port capacity, which can be attained by developing the existing port or rebuilding a new port. Nevertheless, that strategy in not able further implemented because of restricted land availability.

The other alternative is strengthening relation between the world-class ports facilitating in sinter ports program whether it is or not in INAP content. Since the club was founded in 1998, the benefit of it is transferring information among the members, for instance: information of port facilities, technology, berthing charge, handling equipments, or port privatization. It is expected that each member is able giving suggestion to his or her higher authority to make improvement toward those activities.
For that reason, it is better that sister ports program is supported by bilateral agreement in governmental level especially in economic sector. The economic bilateral agreement will provide many advantages as follows:
・ There is simplicity in all aspects, such as investment, trade, berthing guarantee, export/import activities, rules, freight, tariff, tax, window system, port facilities, etc.
・ Having the same point of view and standard on handling equipments, port security, and freight rate.
・ If it is implemented well and smoothly will produce trust on each party.

At the same time, Port of Tanjung Perak is waiting for governmental decision on regional hub port in Indonesia. It is the fact that all Indonesian ports now are as feeders for other overseas ports of Singapore for example. Developing Indonesian ports to be both as national and international hubs, should consider to infrastructure availability, which is able to anticipate hinterland economic development, freight flow, cargo potency, customers’ demands, and commitment of shipping lines as well. The future port types are self-generating port which is integrated with processing / manufacturing / packaging / labeling activities, having directly access to the industrial centers in hinterland and as well as security level with ISPS Code complied security management standard. In principles, appointing hub-ports should consider to the link of both global and domestic connectivity that benefit the customers at the end.

After the issuance of Presidential Instruction no. 5/2005 on National Shipping Empowerment, the government draw up a regulation that is for domestic routes should be served by national shipping company whereas all of foreign shipping company are able to serve ocean going routes only. Supporting it, the government soon appoints several ports as regional hubs under comprehensive considerations. The principal obstacle of it is regarding of Indonesian geographic position as an archipelago country with separated and wide thousand islands, so the government is probably appoint the two largest ports as regional hubs, those are Port of Tanjung Priok with the development to Bojonegara which is serving for Western region, and Port of Tanjung Perak with the development to Lamomg Bay which is serving for Eastern region.

Currently, Port of Tanjung Perak has played as a key port for Eastern Indonesia port business. As a gate for Eastern Indonesia, Port of Ranjung Perak has played as regionalhub port for cargo distribution to Eastern Indonesia as well as East Java in particular. This port takes 75 percent of total cargo to Eastern Indonesia. The average ship calls in Port of Tnjung Perak are 2,000 ocean going vassels per annum, with 30 million tones (GT) per annnum.

The menagement of Indonesian Port of Corporation III will invite investors, through open bidding, for the extension of Port of Tanjung Perak to I among Bay.
This investment is predictably cost at US 200 million dollar.

The extension plan of 50 Ha through reclamation will be able to handle more than 2 million TEUs per annum. Thus, the management will continue to do some preparatory actions. The development plans of 640 meters length and 14 meters depth berth still originally continue because the plan of Lamong Bay development is for container vessels activity only. However, with the 50 ha width port, it is enough for serving container loading/discharging activities, container yard, container freight station , truck parking area, workshop, and office building only, while the plan of back up area development for industrial zone and warehousing area has to be located in the mainland connecting with access bridge.

Viewing those facts, Port of Tanjung Perak has a goal to improve the existing sister port program to the higher level with the purpose of providing more advantages to all of the members by initiating the economic bilateral agreement program.