Japan and Indonesia finalise loan for $1bn Patimban port

The Japanese government has agreed a $1bn loan to Indonesia to pay for the construction of a port in Subang, West Java.

Patimban port, about 120km east of Jakarta, is intended to ease the pressure on the port of Tanjung Priok (pictured), which is hemmed in by Jakarta, and to provide a nucleus for a special economic zone.

As GCR reported last month, three work packages are being offered: terminal, breakwater and seawall, and connecting breach.

Chandra Irawan, Indonesia’s director of ports, said Japanese firms’ technical ability would be useful in building Patimban owing to the type of soil at the site.

"There needs to be double casting to make a strong dock," he said. "There are not many contractors who can do that technique; Japan has capable contractors, but they are not in large number."

Construction will begin in January 2018 and would be carried out in three stages. The aim is to accept the first ships as early as March 2019 and to complete the project in 2027.

As well as the port and its manufacturing district, the project will involve building a 40km, $400m access road. Work on this is due to begin in 2020.

A railway will also be built, however the government is still deciding whether to use an existing line, upgrade it or pay for a new one.

The Indonesian construction market is the object of fierce rivalry between Japan and China, both of whom are competing to build large-scale infrastructure backed up with state-guaranteed loans at preferential terms.  

This rivalry reached a head on the Jakarta-Bandung high-speed rail line in 2015, which proved to be a victory for China’s financial muscle. It is now pursuing schemes across the archipelago as part of the Belt and Road programme.

Other regional players are also joining the fray. Last Thursday (9 November), South Korea signed five memorandums of understanding in transport and other infrastructure projects worth a total of $1.9bn in Jakarta.

One of these deals with Korea Rail Network Authority is to be in charge of the second phase of Indonesia’s light rail transit (LRT) project for reducing traffic congestion and air pollution in Jakarta.

Image: Java’s main port of Tanjung Priok is chronically congested (Creative Commons)

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