Published on March 21, 2014
Port Partnership Seminar, Jakarta 21st and 22nd March 2005 By Capt. Kees Weststrate Sr.Business Development Manager
PortPartnership2005 3 Content 1. Introduction 2. Findings of Port Analysis Model per theme 3. Cobwebmodel 4. Issues, Challenges and Recommendations 5. Conclusions
PortPartnership2005 4 Introduction City of Rotterdam and the City of Jakarta have a sister city relation since 1983 The Port of Rotterdam is a corportised organisation: 100% of its shares are owned by the City City of Rotterdam and the Port of Rotterdam have offered the Port Analysis Model to the City of Jakarta: City paid all expenses Port provided manpower
PortPartnership2005 5 Port Analysis Model (1) The Port Analysis Model (PAM) is a strategic analysis and benchmarking instrument for ports within their surroundings Different units and dimensions of analysis are combined in PAM
PortPartnership2005 6 Port Analysis Model (2) The core of the model is a quantified checklist is built up using a tree-structure The theme’s of the PAM Jakarta study are: general characteristics, port characteristics, institutional environment, investment climate, geography and hinterland connections
PortPartnership2005 7 Content 1. Introduction 2. Findings of Port Analysis Model per theme 3. Cobwebmodel 4. Issues, Challenges and Recommendations 5. Conclusions
PortPartnership2005 8 General Characteristics Indonesia still faces some economical development challenges (IMF, trade facilitation et cetera) Indonesia has enormous potential due to huge national resources Cheap labour is a major competitive advantage for production and processing industries Tj. Priok has a central location on Java near the main production and consumption centres Tj. Priok has the potential to operate as a hub
PortPartnership2005 9 Port Characteristics (1) Variety of cargo activities as: Containers General cargo Ro-ro Dry and liquid bulk Passengers
PortPartnership2005 10 Port Characteristics (2) General: Two container terminals up to international standards One multi-purpose terminal (containers and general cargo) and several general cargo terminals Variety of nautical/maritime services such as dry dock, ship’s cleaning and repair yards
PortPartnership2005 12 Port Characteristics (3) Nautical accessibility: Port entrance too small for the larger container vessels Number of anchored vessels nearby entrance channel and between the breakwaters can create dangerous situations ISPS approved, however no restrictions to enter several facilities without identification
PortPartnership2005 15 Port characteristics (4) Infrastructure: Land access problems with only two gates (container terminals have their own) Infrastructural challenges Multitude of conflicting port development plans
PortPartnership2005 16 Institutional environment (1) Objectives Port of Rotterdam High quality and a reliable services Good nautical accessibility Sufficient space for developments Realisation of sufficient economies of scale Safe and secure port Sustaining and developing clusters of activities: stimulating co-siting and innovation Un-locking of multi modal connections to the hinterland (dedicated rail and inland shipping) → In order to achieve these collective goals all the stakeholders have to be involved and be in agreement with each other: stakeholder management! → Both the local and central government are actively involved in the port → The Port does what is has to do to stimulate and facilitate business, but leave to the market what can be done by the market
PortPartnership2005 17 Institutional environment (2) Role Pelindo is not clear; conflict of interest: Pelindo acts as landlord port manager Pelindo acts as terminal operator: competing with own clients Within the Pelindo organisation various ports are competing with each other
PortPartnership2005 18 Institutional environment (3) Government involvement is not in balance: Central government controls Pelindo Local provincial government is not involved Co-operation and co-ordination between different government agencies is limited Challenge: according to publications in Kompas (18- 02-05) all Pelindo organisations will be merged into one organisation and it will be possible for local government (s) to participate through shareholding
PortPartnership2005 19 Investment climate Favourable taxes and incentives for foreign investor High number of Asian foreign direct investors Port seems to be less open for foreign investor (exceptions for HPH) Jakarta provincial Government is investor-friendly Legally uncertainty is still a major issue (example: ownership of land only for Indonesian nationals)
PortPartnership2005 20 Geography Port is surrounded by the city The only opportunity to extend the port is through land reclamation For the port extension it is necessary to reorganise the infrastructure in the Koja-area
PortPartnership2005 21 Extension plans Jakarta New Port
PortPartnership2005 22 Hinterland connections (1) By road: From the province of West Java, (Bandung area) the main producing area for garments, textile and food approx. 80% of export is via Tj.Priok mainly by road. Small truck deliver non-containerised cargo via Puncak pass with dense traffic Container trucks are routed on toll road via Cikampek
PortPartnership2005 24 Roads on Java
PortPartnership2005 25 Road and traffic Jakarta
PortPartnership2005 26 Hinterland connections (2) By rail: There is an excellent rail connection between Bandung Dry Port and Kampung Koja. There is no rail connection from Kampung Koja to the container terminals in Tj.Priok Transit from rail terminal to container terminals vary between 7 and 14 days Rail transport is more expensive than by truck (due to more handlings and higher lifting costs) Only normal 20´and 40´containers can make use of rail highcubes are not accepted (tunnels) No governmental incentive system for modal shift
PortPartnership2005 27 Rail terminal Bandung
PortPartnership2005 28 Hinterland connections (3) Inter-insular traffic: Most of operations take place at smaller terminals, mixed with international cargoes Volume in 2004: 29.1 million tons Most cargo is not containerized Customs have problems with identifying international and domestic cargoes
PortPartnership2005 29 Content 1. Introduction 2. Findings of Port Analysis Model per theme 3. Cobwebmodel 4. Issues, Challenges and Recommendations 5. Conclusions
PortPartnership2005 30 Cobweb model: scores per theme Cobweb model Total score 0 1 2 3 4 5 6 7 8 9 10 General characteristics Port characteristics Institutional environment Investment climate Geography Hinterland connections Tanjung Priok
PortPartnership2005 31 Content 1. Introduction 2. Findings of Port Analysis Model per theme 3. Cobwebmodel 4. Issues, Challenges and Recommendations 5. Conclusions
PortPartnership2005 32 Issues, Challenges and Recommendations Nine topics have been selected: 1. Strategy 2. Legal framework 3. Comprehensive co-ordination 4. Cost and benefit allocation 5. Port ownership and control 6. Access improvement 7. Transportation efficiency 8. Land acquisition 9. New port development
PortPartnership2005 33 Deciding upon one national strategy for the transportation and port sector Clear policy framework stating concrete goals, strategic considerations and pre-conditions for development; Providing criteria for deciding on the priorities for port and infrastructure development; Local (master)plans on provincial and municipal level have to fit within policy framework; Concrete goals and plans make good planning and control possible! ①
PortPartnership2005 34 Improvement of legal framework for transport sector Reduce lack of clarity: providing security for private sector (especially foreign investors); Clear allocation of tasks and responsibilities for different governmental organisations: government governance*; Short term issues: extension of toll roads require governmental licences which is time-consuming and the central government has marked the port as a vital asset, preventing local government involvement. ② * the processes and systems by which a government operate
PortPartnership2005 35 Balancing acts: trying to reach an equilibrium in central and local government control over the port Today central government involvement is too extensive and local government is too limited ②
PortPartnership2005 36 Creation of a comprehensive co-ordination structure for the municipality/provincial government and central government Intensify and secure information exchange (knowledge management); Governmental planning & control (co-ordination, registration and evaluation of activities); Discussion platforms (continuous consensus building). ③
PortPartnership2005 37 Cost and benefit allocation Financial arrangements to fairly distribute costs/benefits; Local involvement, local financing, local flexibility; Example Rotterdam: Collects port dues from shipping lines Rental income from port premises Port of Rotterdam does not pay any taxes over their income Port of Rotterdam pays a fixed contribution of € 41.6 million to the Municipality of Rotterdam. ④
PortPartnership2005 38 Port ownership and control Good port governance: landlord port (facilitate and stimulate); Secure stakeholders interest as: Local government Central government NGO’s (Environmental, labour unions etc) Private sector parties Organising proper control (checks and balances) Resolve conflict of interest Pelindo II (terminal participation) Rotterdam example: No involvement and participation in terminal operations Keeping neutrality to all customers Proper supervision structure for port management organisation (balance between autonomy and accountability) ⑤
PortPartnership2005 39 Port Management Models ⑤ Most ports in the world, like the Port of Rotterdam, operate like a landlord port.
PortPartnership2005 40 Improve port access A major bottleneck is the land-side access: solve this problem and the competitiveness will be increased significantly. ⑥
PortPartnership2005 41 An efficient transportation sector contributes to the competitiveness of a nation ⑦
PortPartnership2005 42 An efficient transportation sector contributes to the competitiveness of a nation Trucking: quality, insurance, legislation; Rail: availability, government incentives; Rely on economic / business imperatives (costs, time, reliability); Example: feeder service Tj. Priok – Cirebon Economic advantages by reducing transport time to Europe; Lower costs; Custom export document in Cirebon (not in Jakarta). ⑦
PortPartnership2005 43 Land acquisition possibilities for infrastructure development Jakarta Raya is faced with several infrastructural challenges related to quality and availability; Speedy infrastructure development is crucial; ‘Fast and clean’ land acquisition is a pre-condition to speedy infrastructure development; Japanese government and private companies pushing to speed up infrastructural developments by financing study and financing toll road accesses. ⑧
PortPartnership2005 44 New port development: possible planning Short-term Mid-term Long-termShort-term Mid-term Long-term Optimise Tj.Priok Improve land- and sea side access Development of complementary port facilities like in Marunda Realisation of comprehensive infrastructure network Start construction of Jakarta New Port (phased development) Realisation of Jakarta New Port: Jakarta as mainport Positioning Jakarta as a world port ⑨
PortPartnership2005 45 Multiporting Deepsea Carrier A Deepsea Carrier B port 1 port 2 port 3 port 4 Mainporting Deepsea Carrier A Deepsea Carrier B port 1 port 2 port 3 port 4 ⑨
PortPartnership2005 46 Content 1. Introduction 2. Findings of Port Analysis Model per theme 3. Cobwebmodel 4. Issues, Challenges and Recommendations 5. Conclusions
PortPartnership2005 47 Finding the right solutions means bringing all the building blocks together Strategy …. Knowledge exchange Legal Framework …. Governance stuctures Port management model ….. …. Infrastructure development Planning & control Communication Co-operation Port development Co-ordination …. …. Jakarta-Raya has an enormous potential. If all stakeholders can agree on common goals and co-operate efficienly, this potential can be unlocked.
PortPartnership2005 48 Implementing improvements requires having a cohesive phased plan of approach (program management)
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