STUDY ON JAKARTA INTERNATIONAL GATEWAY PORT DEVELOPMENT PROJECT IN THE REPUBLIC OF INDONESIA

Transcription

1 STUDY ON PRIVATE-INITIATIVE INFRASTRUCTURE PROJECTS IN DEVELOPING COUNTRIES IN FY2010 STUDY ON JAKARTA INTERNATIONAL GATEWAY PORT DEVELOPMENT PROJECT IN THE REPUBLIC OF INDONESIA FINAL REPORT March 2011 Prepared for: The Ministry of Economy, Trade and Industry Prepared by: Ernst & Young Shin Nihon LLC Japan External Trade Organization (JETRO) ITOCHU Corporation Oriental Consultants Co., Ltd.

2 Reproduction Prohibited

3 List of Abbreviation A AASHTO APL BKPM American Association of State Highway and Transportation Officials American President Lines Indonesia Investment Coordinating Board C CFS Container Freight Station CKD COD DGST Complete Knock-Down Chemical Oxygen Demand D DO Dissolved Oxygen DPW DWT Directorate General of Sea Transportation Dubai Ports World Dead Weight Tonnage E ECG The Export Credit Group EIA EIRR EN EP Environmental Impact Assessment Economic Internal Rate of Return Exchange of Notes End Point F FIRR Financial Internal Rate of Return FS Feasibility Study G GDP Gross Domestic Products I IBRD International Bank for Reconstruction and Development IC IRR Interchange Internal Rate of Return J JBIC Japan Bank for International Corporation JETRO JICA JICT Japan External Trade Organization Japan International Cooperation Agency PT. Jakarta International Container Terminal K KOJA Terminal Petikemas Koja L LA Loan Agreement LOA Length of Overall M Maersk Maersk Line MAL METI MOFA MOFA MOT MTI Mustika Alam Lestari Ministry of Economy, Trade, Industry Ministry of Foreign Affairs Ministry of Finance Ministry of Transportation PT Multi Terminal Indonesia N NGO Non-Governmental Organization

4 O ODA Official Development Assistance OECD Organization for Economic Cooperation and Development OJA Olah Jasa Andal Terminal P Panamax Panama Maximum size Pelindo II Indonesian Port Corporation II Post-Panamax Post-Panama Maximum size PPP Public Private Partnership PSA PSA international Q QC Quay Gantry Crane R RTG Rubber Tire Mounted Gantry Crane S SEA Strategic Environment Assessment SP Start Point SPC Special Purpose Company STEP Special Term for Economic Partnership T TEU Twenty Foot Equivalent Unit TgPA Tanjung Priok Port Access Road T-N Total Nitrogen T-P Total Phosphorus

5 STUDY ON JAKARTA INTERNATIONAL GATEWAY PORT DEVELOPMENT PROJECT IN THE REPUBLIC OF INDONESIA TABLE OF CONTENTS Executive Summary 1 Background of the Project Study Concept Description of the Project Implementation Schedule Feasibility of the Project Introduction of Japanese Technology etc Risks on Execution of the Project Evaluation of Environmental and Social Impacts Chapter 1 Overview of the Host Country and Sector 1.1 Economy of the Country & Financial Conditions of the Government Description of Transportation Sector Description of Project Area Chapter 2 Study Methodology 2.1 Contents of the Study Method of the Study Study Team Schedule of the Study Chapter 3 Justification, Objectives and Technical Feasibility of the Project 3.1 Background of the Project Container Cargo Demand Forecast Container Terminal Layout Plan Port Plan Conceptual Design: Port Facilities Conceptual Design: Access Road Justification of the Project

6 Chapter 4 Evaluation of Environmental and Social Impacts 4.1 Survey on Existing Matters of Environment Positive Environmental and Social Impact of the Project Negative Environmental and Social Impact of the Project Laws and Regulations on Environmental and Social Impact of the Country Actions to be made by the Government for the Project Chapter 5 Financial and Economic Evaluation 5.1 Cost Estimate: Port Facilities Cost Estimate: Access Road Public / Private Investment Patterns Analysis of Time-Frame of the Project Financial Analysis Preliminary Economic Analysis Risks on Execution of the Project Chapter 6 Planned Project Schedule Chapter 7 Implementing Organization Chapter 8 Technical Advantages of Japanese Company Chapter 9 Financial Outlook Chapter 10 Action Plan and Issues

7 PREFACE This report shows the result of Study on Private-Initiative Infrastructure Projects in Developing Countries in FY2010 contract awarded by Ernest & Young Shin Nihon LLC and received by the group composed of ITOCHU Corporation and Oriental Consultants Co., Ltd. This study Study on Jakarta international Gateway Port Development Project in the Republic of Indonesia deals with the issue of new container port terminal development project to cope with the rapidly increasing cargo demand at Tanjung Priok Port. The possibilities to realize the project is studied which has the scale of about 700 million USD. We, all members of the study team, hope this study will contribute for putting the plan into practice, and will appreciate if the result will become good help for the relevant government officials to understand and to drive forward the project. March 2011 ITOCHU Corporation Oriental Consultants Co., Ltd.

8 EXECUTIVE SUMMARY

9 1. Background of the Project The Greater Metropolitan Area extending from West Java province to Banten province become significantly important center on various industries and have 36% of GDP in total of Indonesia (in 2008, except oil and gas ). The port of Tanjung Priok at this area is functioned as only international commercial port and handled 3.8million TEU in 2009 for the containers. The handling capacity is evaluated at 4million TEU and is expected to have a difficulty on handling near future. In this connection, JICA undertook the studies in the international cooperation for port developments as mentioned below, and reported importance of development for the port infrastructure and access roads in order to improve the trade environment and ensure effectiveness of logistics. << The study for development of the Greater Jakarta Metropolitan ports 2003 >> << The study on trade related system and procedures in the Republic of Indonesia 2005 >> To develop introduction of the private investment, the government provided the policy of PPP (Public Private Partnership) in Presidential Regulation No.42 in In respect of Port development, Shipping Law was enacted in April, 2008 and has induced the private investments in addition to separation of port management/port operation sectors, aiming to introduce competition and effectiveness on port management. JICA was also proceeding the study. << The study on the new public private partnership strategy for the port development and management in the Republic of Indonesia 2009 >> Following the previous supports, the preparation of Master Plan for ports developments in the metropolitan area for 2025 is ongoing by JICA. << Master plan study on port development and logistics in greater Jakarta metropolitan area May, 2010 May, 2011 >> Under processing on the above studies, it is a fact that the cargo volume has been increasing rapidly, that requires urgent projects which cope with immediate increase of the cargoes. The projects have been ongoing under Japanese Yen loans. << The Urgent Rehabilitation Project of Tanjung Priok Port >> ( Scope : widening and deepening the ship lane. Yen Loan : 12 billion Construction : 2011 ) << Tanjung Priok Access Road Construction Project >> ( Scope : Constructing an access road to Tanjung Priok Port Yen Load : 52.9 billion Construction : 2011 ) In addition to above development, the urgent construction of new container terminal in Tanjung Priok Port is now under discussion. In compliance with the request from Indonesian government, JICA is now proceeding Pre-F/S on construction at North Kalibaru after review of their ongoing Master plan study on port development and logistics in greater Jakarta metropolitan area. In the same time, the private investment plan by the state-owned seaport operator, Pelindo II is separately proceeding at their own expense for new container terminal of which the opening is aimed in These 2 plans have different scope and implementation schedule but the discussion on unification is not concluded yet. 1

10 On the other hand, Japanese private firm group consisting of Itochu Corporation and NYK Line intend to participate the terminal management of new terminal and is desiring application of Japanese PPP scheme. Japanese firms opine on management of new terminal that it is essential to work with Pelindo II who is experienced in Tanjung Priok port. However, Pelindo II is going to be one of the terminal operators under new shipping law and may have a difficulty on securing the concession right of new terminal as the established port authority is responsible for competitive selection of the operator under new regulation. To enable Japanese firms to ensure their participation, the development plans should be verified under discussion with the private counterparts and government officials and identified on practicability. This study is processing on construction of new container terminal for Port development plan phase 1 at North Kalibaru for evaluation and shall provide the proposal with action plans from the viewpoints of the private firms in order to ensure implementation. 2. Study of Concept The study is processing in the following steps. 1) Identification of the private investment ongoing plan(pelindo II) First of all, the process and development of the ongoing plan is identified for port plan, details of design, construction cost, and environmental and social evaluation etc. 2) Technical review The technical items are studied as mentioned below. a) Container cargo demand forecast The demand forecast is reviewed based on JICA data of The project of master plan study on port development and logistics in greater Jakarta metropolitan area and the projection of the state-own seaport operator, Pelindo II, and verified. b) Study of container terminal layout plan The requirements of terminal size and capacity is identified in view of current terminal operation data, and current vessel size and possible increase of the tonnage in the fleet for future. The specification and area of the terminal is determined. c) Port plan The port plan is determined based on current private investment plan in consideration to designed vessel size and SEA etc. d) Conceptual design The design calculation is undertaken based on the typical sections of the channel, breakwater, revetment, reclamation, access road and other facilities which are determined in the conceptual design. The implementation of new technical method should be considered in view of squeezing the construction lead time as well as comparison with current method. e) Project cost The estimation of project cost is calculated based on implementation processes of the general design and undertaking the appropriated method of construction in view of short implementation period. The 2

11 introduction of new technologies is discussed in comparison with the previous method. f) Environmental and social impacts The evaluation of environmental and social impacts includes verification of the contents of EIA conducted by Pelindo II and identification of the stake holders. The action plan for the project should be prepared. 3) Justification of the project The justification of the project is evaluated with study of the following items. a) Study of investment demarcation between public and private. It is in general under the ordinary port development and management project that the public is responsible for the unprofitable public investment for the infrastructures including the breakwater and dredging on access channel etc,and the private for beneficial operation and management including installment of the terminal facilities/equipments etc. In this study, the several patterns of demarcation are considered and summarized with the implementation schedule and construction cost in view of urgency of Port development plan phase 1 at north Kalibaru. b) Verification of implementation schedule ( in case study ) The implementation schedule is verified by each demarcation and reviewed for expected completion and commencement of operation. The selective demarcation for earlier completion/commencement of operation is determined for evaluation of finance at next stage. c) Evaluation of finance ( in case study for practicability ) The verification of the costs is undertaken with study on practicability of implementation schedule. d) Contributed economical effectiveness ( in view of National investment ) The contribution to economical effectiveness is considered and verified in case of execution and inexecution. 4) Proposal toward implementation of the project The proposals of study team are compiled based on the above verifications. a) Appropriate demarcation of public/private investments in view of commencement on operation and profitability. The timing of commencement and appropriate demarcation is proposed in consideration of implementation schedule and financial evaluation. b) Utilization of Japan ODA finance program The amount and investment objectives are proposed. c) Utilization of Japanese technology on port construction The proposal on utilization of Japanese advanced technology is prepared in order to squeeze the construction period and quality management. d) Action plan The action plan is prepared and includes each tasks for private and public parties concerned including promotion/negotiation with Japanese/Indonesia governments for implementation of the projects. 3

12 3. Description of the Project 3.1 Progress of DGST plan DGST responsible for the port development plan is preparing the Master Plan of Tanjung Priok port and under assistance of JICA and proceeding Pre-F/S for North Kalibaru phase 1 plan. DGST have approved the port development plan at North Kalibaru phase 1 in November, 2010 proposed by the interim report of JICA study team and is going to revise the Master Plan. The JICA study including Pre-FS for North Kalbaru will be completed until May 23, 2011 and then, the request on assistance of F/S and DD etc will be issued with Japanese government to proceed the plan. Fig 3-1 Port development plan at North Kalibaru phase 1 proposed by JICA study team ( source : the interim report of JICA in November, 2010) 3.2 Progress of the Private investment plan (Pelindo II) Pelindo II is proceeding detailed design and selection of the contractor at their expense aiming to open new container terminal in Pelindo II argued on their possession of the concession right that there no need to have competitive tender in case of the entire private investment unless PPP project. The port development plan of the private investment by Pelido II shown below Fig 3-2 was based on the Master Plan prepared by MOT in 2007 but it differs from the plan proposed by JICA study team and incorporated in the revised Master Plan by DGST. DGST is not taking a positive stance to accept commencement of the construction on their plan. The argument between Pelindo II and DGST is unresolved and will require further development with uncertainness. 4

13 Fig 3-2 Port development plan at North Kalibaru (The private investment plan) ( source : Pelindo II ) 3.3 Participation of 2 Japanese private firms Itochu Corporation and NYK Lines have initiated the PPP project under Japanese ODA loan and intend to participate on thee operation/management of the container terminal at the port development plan phase 1 at North Kalibaru. The port plan on this PPP project was modified based on the proposal of JICA study team is shown below. Their management plan is based on joint venture with Pelindo II, who is however making argument on long implementation schedule under utilization of Japanese ODA loan as the opening of new terminal requires urgency due to higher growth in the projected throughput. Based on our finance analysis, it is quite difficult for Japanese firms to participate the project with higher risks as the all private investment had FIRR at lower rate less than 10% in calculation. On the assumption of participation of 2 Japanese firms in terminal operation business, the concession right is essential to lie at Pelindo II but it is not fixed due to competitive tender process required in new regulation. Pelindo II is insisting to proceed their plan at private investment to ensure obtainable concession right at earlier stage. This issue is still unresolved and under argument. 5

14 Fig 3-3 Port development plan at North Kalibaru (proposed by the study team) The points argued are summarized as follows; Table Summary of the points argued in the plans ITEM Pelindo II DGST (JICA Study) METI Study Development Plan Development Cost Year of Commencement Operation Berth Length:800m Depth of Basin:-18.0m Location:East Water of the Port 617 Million USD (Pelindo Study) 2013 Berth Length:1,200m Depth of Basin:-15.5m Location:North Water of the Port 1,000 Million USD (Progress Report; still under estimation) 2015~2016 (Progress Report; still under estimation) Berth Length:1,000m Depth of Basin:-14.5m Location:North Water of the Port 789 Million USD (METI Study) 2015: Partial Operation 2016: Full Operation Finance All Private Investment Basic Infra:Yen Loan Terminal Facilities:Private Basic Infra:Yen Loan Terminal Facilities:Private Concession Right Obtained by private operator with own investment Port Authority will call tender for concessioner Obtained by private operator with own investment Operator PPP Scheme Assumed Pelindo II & local/foreign partners Introduction of PPP scheme is assumed not required Port Authority will call tender for concessioner Concession right will be given through tender competition even for unsolicited project Assumed Pelindo II & Japanese Private Investors Introduction of Japanese PPP scheme is assumed on the condition that Pelindo II and Japanese investors will obtain concession right Japanese 2 firms would like to start discussion of the partnership in new terminal management firm but at first, it is recommendable to induce Pelind II to agree PPP scheme with Japanese ODA loan which enable to reduce the financial risks and to discuss on ensuring possession of concession right. 6

15 Container Throughput (1,000TEU) 4. Implementation Schedule The implementation schedule of the development plan at North Kalibaru finally proposed by the study team is shown below table (Table 4-1 Implementation schedule). On this study, the handling capacity at the current facilities in Tanjung Priok port is estimated at 5million TEU for the international containers which will be increased as per the international container forecast in Fig 4-1 Throughput forecast for international/domestic containers at Tanjung Priok. Based on these forecast and estimation, it is opined that the commencement of operation for new terminal in the port development plan at North Kalibaru phase 1 is required in 2015 at latest. The implementation schedule is extended for 5 years but it is essential to ensure schedule management accurately so that the terminal can be completed without delay. Table 4-1 Implementation schedule Fig 4-1 Throughput forecast for international/domestic containers at Tanjung Priok 20,000 15,000 Total Throughput Forecast International Container Forecast Domestic Container Forecast 10,000 5,000 0 Year 7

16 5. Feasibility of the Project 5.1 Preliminary Economic Analysis The purpose of this section of the report is to evaluate the effect of public investment from the viewpoint of the national economy. The national benefit is calculated based on the comparison between the With Project Case and the Without Project Case. With Case Without Case : defined as the completion of the project proposed in this study. : defined in order to handle the excess cargos which are more than the capacity of the existing container terminals. It is assumed that the cargos are handled at the TJ Emas port, which is located in the Java Island, and transferred to the hinterland of TJ Priok port by truck. The feasibility of the project is evaluated with the calculated Economic Internal Rate of Return (EIRR). Table EIRR calculation results CASE Alternative A Alternative B BASE CASE 20.7% 20.6% the costs increase by 10% 19.5% 19.4% the benefits decrease by 10% 19.4% 19.3% In general, it is said that a project with an EIRR of more than 15% is economically feasible considering the opportunity cost of capital in Indonesia. As for this study, the resulting EIRRs of all cases are larger than 15%. This means that the planned project is economically feasible. 5.2 Preliminary Financial Analysis The purpose of this section is to evaluate the feasibility of this project by calculating FIRR (Financial Internal Rate of Return) on the soundness of the balance of payments and investment earnings over time. The study is proceeded on the fore-mentioned plans in chapter 3, Alternative A ( all private investment ) and Alternative B ( public private partnership ) for comparison. The procurement of investments by the terminal operator is assumed to comprise 30% by the owned capital and 70% by a loan from the commercial bank based on the discount rate of 10.5%. 8

17 Alternative A, Case 6 項目 Table Financial terms and condition for analysis 政府 民間 1 事業費分担 - 2 収入 - 航路浚渫 防波堤建設 地盤改良 埋立 橋梁 道路建設 岸壁建設 陸上ターミナル施設建設 荷役機械調達 荷役手数料 トランシップ料 コンテナ保管料 コンテナ転地料等 3 運営費 - 人件費 燃料費 水道光熱費 ターミナルマネージメント費 4 維持管理費 - 5 減価償却費 - 6 税金 - 利益の 20% 岸壁 ヤード舗装 建物 荷役機械 維持浚渫 アクセス道路防波堤 護岸 埋立地 アクセス道路 岸壁 ヤード舗装 建物 荷役機械 7 物価上昇 年率 5% の物価上昇率を 2020 年まで考慮 ( 建設費 運営費 ) 8 レベニューシェア 9 資金調達 - Alternative B, Case 1 項目 政府 自己資金 30% 市中銀行 70% 市中銀行 ( 年利 15% 返済期間 10 年 据置期間なし ) 民間 1 事業費分担航路浚渫 防波堤建設 地盤改良 埋立 橋梁 道路建設岸壁建設 陸上ターミナル施設建設 荷役機械調達 2 収入岸壁使用料 曳船料等 荷役手数料 トランシップ料 コンテナ保管料 コンテナ転地料等 3 運営費人件費 水道光熱費等人件費 燃料費 水道光熱費 ターミナルマネージメント費 4 維持管理費維持浚渫 アクセス道路岸壁 ヤード舗装 建物 荷役機械 5 減価償却費 - 岸壁 ヤード舗装 建物 荷役機械 6 税金 - 利益の 20% - 7 物価上昇 8 レベニューシェア 9 資金調達 民間ターミナルオペレーターの収入の 10% を Royalty として政府に支払うと仮定 円借款 ( 年利 1.5% 返済期間 25 年 据置期間 7 年 ) 円借款 STEP( 年利 0.2% 返済期間 40 年 据置期間 10 年 ) 年率 5% の物価上昇率を 2020 年まで考慮 ( 建設費 運営費 ) 自己資金 30% 市中銀行 70% 市中銀行 ( 年利 15% 返済期間 10 年 据置期間なし ) The outcome of evaluation is summarized in the below table. FIRR(Financial Internal Rate of Return) of Alternative A was calculated at lower value, 8.6%, which is below the discount rate of 10.5% in the assumed owned capital (30% of total investment amount). In the other hand, Alternative B was quoted at 3.8% for FIRR in the public portion and 18.1% for the private portion. The major revenue of the public comprises the royalty (10% of the revenue of private terminal operator) on the previous assumptions but the lower interest loans including Japanese yen loan shall be required to compensate repayment of the loan. The discussion is continued at the chapter of Cash flow in details. FIRR for the private portion 18.1% which is higher than the discount rate of 10.5%. It is recognized that Alternative B is very feasible in financial viewpoint. As the result of evaluation, the Alternative B plan would be proposed for the favorable demarcation in finance. Investment Cost (1,000 USD) Table Summary of financial analysis Alternative A Case 6 Private Operator Government Alternative B Case 1 Private Operator 906, , ,700 Total 946,000 FIRR (%) 8.6% 3.8% 18.1% (Sensitivity Analysis) (A) 10% overrun for investment cost FIRR (%) 7.7% 3.2% 16.5% (B) 10% lower demand FIRR (%) 7.2% 3.1% 16.3% (A) & (B) FIRR (%) 6.4% 2.5% 14.7% 9

18 6. Introduction of Japanese Technology etc 6.1 Technical Advantage Container terminal management It is understood that it is significant to consider the quality of service for the users in terminal management and to ensure continuous efforts and improvements on operational productivity and efficiency among the terminal operators in competition in order to obtain the regular users (shipping lines). Japanese global shipping lines have managed and operated their own terminals, through which they have built their knowledge/experiences on operational demand/required productivity/efficiency etc and management skill at the position of not only for the ships operator (terminal user) but also terminal management. Especially, their terminals in Japan have achieved higher productivity among the world under cooperation with the local stevedore labors. Their knowledge and activity in Japan terminal has been valued in terminal management overseas and contributed to the benefit for the foreign shipping lines who are jointly operated and in vessel-shared operation Cargo handling equipments The terminal requires introduction of highly efficient machineries with stable performance and low breakdown ratio in order to ensure smooth and safety operation. The electrical equipment management system for these equipments is especially required to be high quality and stable due to direct factor on emergency stoppage by breakdown and safety issue involved during operation. Low defect ratio can contribute to not only cargo operation management but also maintenance cost under long term operation. Under these requirements, Japanese equipments have the advantage to the others. Considering to environmental effects and energy issue in future, Japanese manufacturers have developed hybrid machineries and electrical RTG etc with technical advantage Construction work It is said that Japanese firms have the advantage of a quality and process management to Chinese, Korean, Indian, Thailand and other contractors. It is considered that Japanese contractors are beneficial for this project which requires short implementation schedule and quick commencement of operation. With regards to construction materials, a quality of steel pipe piles and corrosion-proof technology have been higher than other Asian products. The introduction of Japanese high technology on soil improvement is practical and is definitely contributing to expediting schedule and higher quality Study / Design Japanese consultants have so far worked on various ODA projects in Indonesia and preformed well for preparation of Master Plan, feasibility study, detailed design, selection of contractors, construction management and other wide fields. For this project, it is essential to invite Japanese consultants in view of necessary introduction of Japanese technology on managing construction under tight schedule, soil improvement and others. 6.2 Economical Advantage Price competitiveness of Japanese firms Japanese manufacturers and construction firms have been highly appreciated by Asian government officials in technical, delivery and punctual viewpoints but it allows impression of high costs. The increase of cost has been attributed to the direct and indirect costs on the labor, domestic transportation and land etc. Japanese firms have continued to various efforts on reduction of the costs by proceeding overseas transfer of the production and localization at the development countries Utilization of Japanese ODA PPP project Japanese MOFA fully recognized importance and contribution to the economical progress of the development countries by Japanese private investments and have encouraged their support on the government finance including ODA and activities of Japanese firms in cooperation with the related government officials and assistance firms in collaboration. By utilizing their official and political supports, it is expected that Japanese firms have financial advantage and develop their activities which will contributing to the counterpart countries. With regards to this project of the port development plan at North Kalibaru phase 1, it is recognized that 10

19 the scheme of Japanese PPP project with moderate loan program supported by Japanese ODA loan should be discussed and accepted instead of the entire private investment plan proposed by Pelindo II Optimizing of Japanese ODA terms, STEP STEP project was introduced in 2002 to optimize Japanese competent technologies and know-how for overseas transfer to the development countries. The regulation and policy have offered the special Japanese loan terms of the lower interest at 0.2% for a loan period of 40 years in case of Indonesia, subject to procurement of Japanese products/materials for more than 30% of the concession price. This financial terms should be effective in the project favorably and supported financially with advantage when implementation. 7. Risks on Execution of the Project 7.1 Necessity for expediting the study/formalities on Japanese ODA scheme The study is proceeded in case of adoption of Japanese ODA loan for the public portion. It is understood that Japanese government have proceed review of the ODA application process in compliance with the request of expediting the process by the counterpart countries and in viewpoints of strategic effectiveness on the support. Japanese government declared the policy in June, 2008 in respect of Expediting Japanese ODA loan process that the approval lead time for procurement of the consultants and construction work should be shortened to within 2 years as target. It is recognized that this policy has been reviewed every year with additional amendments for improvement. It is recommendable that this policy should be optimized for implementation of the subject projects. With regards to this project, it is considered that E/S (Engineering Service) loan may be applicable and needs to accept the engineering service including collection of the site data, detailed design and preparation of the tender documents etc for the design work in advance to the construction work. This loan scheme is subject to completion of the feasibility study with official acceptance of the practicability/justification of the project, and may be applicable in this project case as the practicability/justification was already confirmed by Pre-F/S of JICA study although F/S is not officially finalized. In ordinary Yen loan, it is in principle that the environment assessment report should be disclosed by 120 days prior to conclusion of the concession contract but E/S loan allows to go on the environment assessment in parallel with design work and preparation of the tender documents, and is one of the favorable option for consideration. In order to expedite the construction aiming to early commencement of the terminal operation, it is required that the various method to reduce the implementation time should be considered and discussed in any occasion. 8. Evaluation of Environmental and Social Impact 8.1 Existing Matters of Environment General The target area of this study is around the port of Tanjung Priok, because the subject of this survey focuses on the phase I of the port development plan of Tanjung Priok Port. In the Tanjung Priok port, the employment of around 30,000 people has been produced and in the Kalibaru fishing port, which is at the east side of Tanjun Priok Port, approximately 2,000 fishermen have lived. In sea area of the Tanjung Priok port, the water pollution is observed with the problem. Therefore in this development plan for the new container terminal neighboring inhabitants and environment should be considered. 8.2 Positive Environmental and Social Impact of the Project With implementation of the project such as construction of new container terminal and access roads, removal of the existing breakwater, the environmental improvement around project site can be considered as follows. By removing the breakwater at east side of the port, the water flows inside the port are becoming faster and the sea water are exchanged. The improvement for water quality is expected. (Natural Environment) By access of the larger vessels accompanied with development of container terminals and increases of 11

20 depth in the routes and at anchorage, CO2 emissions per container 1TEU is expected to be reduced. (Natural Environment) It is expected to hire local residents for the workforce required in the port. So, it is expected to improve the life level of residents and generate employment opportunities for local residents. (Social Environment) With construction of the new terminal and increase of the cargo volume, it is expected to increase industrial and regional development at the hinterland. (Social Environment) 8.3 Negative Environmental and Social Impact of the Project Table 8-1 List of Environmental and social impacts Category 2 Pollution Control 4 Social Environ ment Environmental Item (1) Air Quality (2) Water Quality (3) Wastes (4) Noise and Vibration (1) Resettlement (2) Living and Livelihood Confirmation of Environmental Considerations The examinations on compliance with the environmental standards should be carried out in EIA, because it would be affected by increase of passing vehicles with this project. Water quality simulations for alternative plans should be carried out in EIA exam, because it would be affected by variation of layout of port with this project. The disposal plan of waste materials should be prepared and it should be strictly supervised during the implementation of this project. The examinations on compliance with the environmental standards should be carried out in EIA, because it would be affected by increased of passing vehicles with this project. With construction of access roads, the resettlement of 50 houses may be required. In EIA exam, the route to minimize number of houses to be resettled should be considered from alternative routes. Depend on layout of the terminal and the route of access road, fishermen of Kalibaru fishing port are limited to maritime traffic. 8.4 Alternative Plans As a comparison of layout of landfill and access roads, Pelindo II plan and Master Plan are compared at the view point of the environmental impact. Table 8-2 Alternative plans about environmental impacts PELINDO II Plan Master Plan A route B route C route A route B route C route Layouts 12

21 Fishery Water Quality Residents Fishery to use aquacultures at reclamation areas should be moved. Fishermen of Kalibaru fishing port are limited to maritime traffic. The piers in fishing port with C route would affect to traffic convenience for fisherman. By removing the breakwater and widening water area, partially improvement for water quality is expected. Polluted materials may transfer to Kalibaru fishing port. Number of houses to be resettled with construction of access road : about 50 houses Number of houses to be resettled with construction of access road : about 50 houses Number of houses to be resettled with construction of access road : about 25 houses No impacts on fishery Due to securing water flow at east side of port, big improvement for water quality would be expected. Number of houses to be resettled with construction of access road : about 50 houses Evaluate 8.5 Actions to be made by the Government for the Project Pelindo is promoting the private investment plan which is based on Master Plan of the Tanjung Priok port in The three provinces (DKI Jakarta, Bekasi and Tangeran) have conducted SEA survey about coastal area use of the Java Sea, and until December 2010 (or January 2011) will submit SEA to Ministry of the Environment (or their organizations) and plan to get approval from MOE. After approval of SEA, Pelindo would submit EIA (under preparation) to MOE and in three months the development permit would be receive from MOE. 13

22 Chapter 1 Overview of the Host Country and Sector

23 Population (thousand person 1.1 Economy of the Country & Financial Conditions of the Government Indonesia has around 17,000 islands. Its area is 1,922,570km2 (5.1 times the area of Japan) having large population around 230 million in 2009 which is the forth in the world and 1.8 times of the population of Japan. GDP of Indonesia is 540 billion US dollars in 2009 (18th in the world, one tenth the GDP of Japan), and GDP per capita of Indonesia is 2,329 US dollars in 2009 (116th in the world, one seventeenth the GDP per capita of Japan). Real GDP growth rate is 4.5% in Indonesia has some hundreds of races and has quite long sea coast from east to west so that unification and balanced growth are the very important agenda in Indonesia Population The population of Indonesia will increase continuously and will reach about 273 million in % of its population concentrates in the Jawa Island whose area is only 7 % of the area of the whole country. Especially in the DKI, its population is over 9 million and its population density is about 14 thousand people to a square kilometer. Fig Estimation of the future population of Indonesia 300, , , , , , , , , , , , , , , , , Year Source;Indonesia Population Projection Agustus GDP As well known to the public, the Indonesian economy suffered from the Asian economic crisis, and its GDP growth rate sharply dropped to % in 1998 and only 0.79 % in Indonesian economy, however, got back on track in 2000 with a healthy growth rate of 4.9 %. Since then, the national economy has showed steady growth with annual growth rates of about 5 %. Even in the Lehman shock economic crisis in 2009, Indonesia survived the crisis with 4% of the economic growth. Indonesian President Yudhoyono's second term cabinet set the midterm target figure of real GDP growth rate as 6 to 7 % in order to decrease unemployment and poverty to the half. GDP per capita would reach 4,500 US dollars and GDP would reach 110 billion US dollars in case the steady economic growth would be realized. 1-1

24 GDP growth (annual %) GDP per capita (current US$) Fig Real GDP growth rate and GDP per capita , ,000 1,500 1, year GDP growth (annual %) GDP per capita (current US$) Source;The World Bank Table Actual results and future plan of Yudhoyono's cabinet Economic index Actual results Future plan ~14 (Ave.) 2014 Real GDP growth rate 5.0% 4.5% 6.55% 7.0~7.7% GDP (nominal value, billion $) ,111.0 GDP per capita (US$) 1,187 2,590-4,500 Fiscal balance (% of GDP) -1.0% -1.6% -1.5% -1.2% the ratio of total government debt to GDP 54% 29% - 24% Unemployment rate 9.9% 7.9% - 5~6% Poverty rate 16.6% 14.2% - 8~10% Inflation rate 6.4% 2.8% 4.8% 3.5~5.5% Source;BAPPENAS; National Mid-term Development Plan Financial Condition Prior to the economic crisis, Indonesia had a relatively comfortable debt situation. The GOI borrowed abroad each year, primarily from the World Bank, Asian Development Bank, and a group of bilateral donors grouped in the Consultative Group on Indonesia (CGI). The proceeds were used to fund the development budget. By long-established convention, the GOI avoided domestic borrowing, and Indonesia's debt/gdp was sustainable. Indonesia's debt management policies were an important part of what was widely viewed as a prudent macroeconomic management strategy. This situation changed in , when Indonesia for the first time developed a large domestic debt stemming from the costs of the country's banking sector bailout. As Figures below indicates, the broadest measure of the impact of debt is the ratio of total government debt to total economic output or GDP. The ratio of public debt to GDP has fallen from 100 percent (1999) to 40.8 percent in 2006 and is expected to decline to percent by This is comparable with neighboring countries. The burden of Indonesia s debt on its budget is back to pre-crisis levels. Another measure of the impact of debt is the share of government resources that have to be paid to service debt, including principle and interest. Debt service as a share of total expenditures improved from as high as 38 percent in the pre-crisis level ( ) to 26 percent in recent years ( ). Debt service to expenditures is projected to be around 23 percent. 1-2

25 Fig Gov t debt to GDP ratio (%) Fig Gov t Debt Services share to total expenditure (%) Source;Indonesia s Debt and World Bank Assistance, World Bank HP 1.2 Description of Transportation Sector Indonesia has around 17,000 islands and its large population around 240 million having linkage with widely distributed international and domestic markets. Thus it is essential to establish logistics system providing an effective, efficient and economical cargo distribution services supported by logistics infrastructures. However, it is said that Indonesia s current logistics does not provide satisfactory services and one of its main causes is a shortage of infrastructures. Under the atmosphere of fierce business competition at the global level and in the compliance of various agreements within ASEAN and APEC in the field of logistics recently in effect at the regional level, Indonesia is required to urgently improve its logistics system. The Greater Metropolitan Area extending from West Java Province to Banten Province has a population of around 70 million accounting for approximately 30% of the total of the country and a centre of a manufacturing industry as well as the largest consumption area in Indonesia. Consequently, massive container movements through Tanjung Priok Port, which is the largest container port in Indonesia. The shortage of port facilities of Tanjung Priok Port both especially in container yards and container-handling machines, and extraordinary congested access roads to the port within Jabodetabek (Jakarta, Bogor, Depok, Tangeran and Bekesi) are forcing costly container transport costs to consignors/consignees. To resolve the current problems including those related to port cargo transport and to meet ever increasing demand for the future in logistics, the Government intends to develop a National Logistics Blueprint based on Presidential Directive Number 5 Year 2008 to cover vision, mission, goals, strategies, directions, policies, implementation phases and action plans through coordinating the Ministry of Economy and involving the ministries concerned. The blue print is expected to serve as a reference and guidelines for relevant sectors establish their policies and to be able to a means of building national competitiveness and achieve social welfare. In the meanwhile, the Government of Indonesia enacted new Shipping Law (Law Number 17 Year 2008) in 2008 and in the compliance of the maritime law proclaimed the Port Regulation (Government Regulation of the Republic of Indonesia Number 61 Year 2009). The main clauses provided by the port regulation are listed as follows: 1) No. 3 Clause (National Port System) Ports in Indonesia are divided into two categories: sea port and river/lake port. Sea port is further classified into three categories: Main Port, Gatherer Port and Feeder Port. A National Port Master Plan as a guideline for individual port master plans is formulated by the Minister of Transport. For that purpose, Directorate General of Sea Transportation (DGST) of the Ministry of 1-3

26 Transport is drafting the master plan with assistance of a Singaporean Consultant sponsored by Aus-AID (Austrian Agency for International Development). 2) Nos. 72~77 Clauses (Port Principal Plan) There is legal obligation to formulate a Port Principal Plan including Land and Waters Allocation Plans, a Port Area and an Area adjacent to the port area in each port. The Port Principal Plans are formulated by the Minister of Transport through hearing in case of Main, Gatherer and Feeder Ports from the related Governor and Regent/Mayor and in case of Feeder Ports, from the related Governor or Regent/Mayor. 3) Nos. 79~88 Clauses (Port management Body) There is legal obligation to establish a port management body in each port. A port authority in a commercial port and a port management unit in a non-commercial port are port management bodies, respectively. A port management body has a authority to give licences of various operations such as stevedoring warehousing and forwarding and to grant concessions for terminal management to concessionaires within a port area. The authority of the port management body is entrusted by the Central Government. Concession fees are transferred to revenues of provincial governments. 4) Nos. 96~99 Clauses (Port Development and Management) Port development needs to be sustainable, which maintains acceptable levels of environmental impact throughout periods from construction to operations together with satisfying technical standards. 1.3 Description of Project Area The location of TJ Priok port is about 10 km north-east of Jakarta city center and is the largest in Indonesia and only one international commercial port in DKI. TJ Priok port plays important role for sea cargo transportation and sea passenger transportation as well. TJ Priok port has six wharves and two harbor entrances; Eastside and Westside. However, only Westside harbor entrance is available with minus 14 meters depth. The width of sea lane is so narrow that basically it is one way. Due to such circumstances, TJ Priok port is generally known as inconvenience for entry and departure. TJ Priok port was opened in 1886 having long history. In 1978, its first container terminal was opened which is now operating as JICT II. Following the rapid growth of container cargo volume, new container terminal, JICT I, was opened in 1990 and Koja container terminal was opened in The entire container handling volume of TJ Priok port reached 3.8 million TEU in 2009 with rapid growth rate. Fig Location map of JICT and Koja container terminal Koja JICT II JICT I Expansion Area JICT container terminal JICT is the terminal operator established in The main share holder is Hutchison Port Holdings with its share of 51 % and the rest of the share is owned by Pelindo II. 1-4

27 Existing facilities of JICT are shown in the table below. The current container handling capacity is about 2.2 million TEU in They have a plan to expand its capacity up to 2.8million TEU in the future. Table Existing facilities of JICT container terminal JICT I JICT II Total Quay Crane RTGC Berth length 1,620m 520m 2,140m Draft Alongside -11.7~14m -8.5m - Terminal Area 83.5ha 9.5ha 93ha Stacking Capacity 35,000TEU 7,600TEU 42,600TEU Fig Expansion plan of JICT container terminal Source;JICT Koja container terminal Koja container terminal opened in 1998 and Joint venture company of Pelindo II and private company is operating the terminal. Its facilities are shown in the table below. Table Koja container terminal facilities Koja Quay Crane 6 RTGC 21 Berth length 640m Draft Alongside -14m Container yard 21.8ha Stacking Capacity 14,256TEU Source:Koja Container Terminal Website 1-5

28 1.3.3 Issues of TJ Priok The following current issues have been recognized at TJ Priok Terminal. [Shortage of port facilities] Container handling volume in TJ Priok has increased continuously and it will reach the handling capacity in 2015 even though the expansion plan of the container terminal will completed on schedule. [Excessive congestion on port access roads] Port users such as forwarders, trucking companies and consignors/consignees are suffering from excessive road traffic congestion in the hinterland of the port especially within JABODETABEK (Jakarta, Bogor, Depok, Tangeran and Bekesi) area. [Congestion within the port] There are shortage of the port facilities including the number of berths and yard space, and resulting in the congestion within the port. Even container ships scheduled for regular services are occasionally forced to wait off-shore. In addition due to the shortage of yard space, container dwelling time is restricted and containers are often shifted to off-dock yards without notice to consignees generating additional expenses. [Insufficient water depth and space of turning basins to receive larger container ships] Shipping lines hesitate to bring even Panamax Type container ships with only 3,000 TEU capacities due to shallowness in access channel and alongside berths as well as narrowness of turning basins Current conditions of the port Aerial photos taken in March 2010 are shown below. Photo-1 Overview of TJ Priok(view from East side) 1-6

29 Photo-2 Overview of TJ Priok(view from West side) 1-7

30 Photo-3 JICT I Container Terminal Photo-4 Koja Container Terminal 1-8

31 Chapter 2 Study Methodology

32 2.1 Contents of the Study The port of Tanjung Priok has been functioned as main commercial port for greater Jakarta metropolitan area and it s container throughput has reached at 3.8 million TEU ( 2.7 million for international cargo and 1.1 million for domestic cargo ). The current handling capacity is roughly estimated at 4 million TEU and is expected to be in full near future. In order to cope with this development, the Pelindo II, the counterpart of the study team and the stated-owned seaport operator is already preparing reclamation and construction of new terminal at north Kalibaru for their account. Their phase 1 plan is proceeding at the tender of construction contractors as of November, 2010 after the basic design of facilities was completed by their Indonesian consultant. In view of current process of the private investment plan, the study is undertaken by 4 processes with the following details. 1) Identification of the private investment ongoing plan(pelindo II) First of all, the process and development of the ongoing plan is identified for port plan, details of design, construction cost, and environmental and social evaluation etc. 2) Technical review The technical items are studied as mentioned below. a) Container cargo demand forecast The demand forecast is reviewed based on JICA data of The project of master plan study on port development and logistics in greater Jakarta metropolitan area and the projection of the state-own seaport operator, Pelindo II, and verified. b) Study of container terminal layout plan The requirements of terminal size and capacity is identified in view of current terminal operation data, and current vessel size and possible increase of the tonnage in the fleet for future. The specification and area of the terminal is determined. c) Port plan The port plan is determined based on current private investment plan in consideration to designed vessel size and SEA etc. d) Conceptual design The design calculation is undertaken based on the typical sections of the channel, breakwater, revetment, reclamation, access road and other facilities which are determined in the conceptual design. The implementation of new technical method should be considered in view of squeezing the construction lead time as well as comparison with current method. e) Project cost The estimation of project cost is calculated based on implementation processes of the general design and undertaking the appropriated method of construction in view of short implementation period. The introduction of new technologies is discussed in comparison with the previous method. f) Environmental and social impacts The evaluation of environmental and social impacts includes verification of the contents of EIA conducted by Pelindo II and identification of the stake holders. The action plan for the project should be prepared. 3) Justification of the project The justification of the project is evaluated with study of the following items. a) Study of investment demarcation between public and private. It is in general under the ordinary port development and management project that the public is responsible for the unprofitable public investment for the infrastructures including the breakwater and dredging on access channel etc,and the private for beneficial operation and management including installment of the terminal facilities/equipments etc. In this study, the several patterns of demarcation are considered and summarized with the implementation schedule and construction cost in view of urgency of Port 2-1

33 development plan phase 1 at north Kalibaru. b) Verification of implementation schedule ( in case study ) The implementation schedule is verified by each demarcation and reviewed for expected completion and commencement of operation. The selective demarcation for earlier completion/commencement of operation is determined for evaluation of finance at next stage. c) Evaluation of finance ( in case study for practicability ) The verification of the costs is undertaken with study on practicability of implementation schedule. d) Contributed economical effectiveness ( in view of National investment ) The contribution to economical effectiveness is considered and verified in case of execution and inexecution. 4) Proposal toward implementation of the project The proposals of study team are compiled based on the above verifications. a) Appropriate demarcation of public/private investments in view of commencement on operation and profitability The timing of commencement and appropriate demarcation is proposed in consideration of implementation schedule and financial evaluation. b) Utilization of Japan ODA finance program The amount and investment objectives are proposed. c) Utilization of Japanese technology on port construction The proposal on utilization of Japanese advanced technology is prepared in order to squeeze the construction period and quality management. d) Action plan The action plan is prepared and includes each tasks for private and public parties concerned including promotion/negotiation with Japanese/Indonesia governments for implementation of the projects. 2.2 Method of the Study 2.3 Study team The method of the study and organization of study team are charted as below Fig and

34 Meeting & Report Work Contents Fig Method of the study Y M Step Study Method & Budgeting November December January February Preparation Works in Jakarta (1) Jakarta (2) Works in Japan Works in Japan Info. Survey Coordination with JICA M/P Team IC/R Explanation of Study to Relevant Authorities Survey of Port Public Sector & Port Operation Port Demand Forecast Terminal Layout Planning Port Planning & Access Road Conceptual Design & Cost Estimate PPP Public/Private Allocation of Investment Items Economic Analysis Financial Analysis Financial Plan Explanation of Draft Report & Discussion Final Report Legal System on PPP Business Action Plan Environmental Screening Draft Report Initial Meeting in Jakarta Progress Meeting in Tokyo Draft Report 11th. Jan Final Meeting in Jakarta Final Meeting in Tokyo Final Report Submission 21st Feb. 2-3

35 Fig Study team PPP Project Yukihiro Tanigaki General Manager Logistics Projects Department Itochu Corporation Project Manager Koji Komai Deputy General Manager Logistics Project Department Itochu Corporation Financial Analysis Shigeo Takabayashi Logistics Project Department Itochu Corporation Legal Scheme Isao Takahashi Logistics Project Department Itochu Corporation Engineering/Port Planning Masatoki Nakanishi Port & Harbor Department Global Consulting H.Q. Oriental Consultants Co., Ltd. Design & Cost Estimate Port Facilities Masato Suzuki Port & Harbor Department Global Consulting H.Q. Oriental Consultants Co., Ltd. Planning & Operation, Container Terminal Kazutoshi Tsuchiya Port & Harbor Department Global Consulting H.Q. Oriental Consultants Co., Ltd. Design & Cost Estimate, Port Facilities Toshinori Kanazawa Road Planning Department Global Consulting H.Q. Oriental Consultants Co., Ltd Economic Analysis Yasuo Kannami Port Harbor Department International Development Team Pacific Consultants Co., Ltd. (contracted) Environment/Social Impact Daiki Tsujio Port Harbor Department Pacific Consultants Co., Ltd (contracted)) 2-4

36 2.4 Schedule of the Study The period of study is from November 26 th, 2010 to February 21 st, 2011 and includes the work in Jakarta consisting of first and 2nd trips as shown in Table Table Schedule of the Study NO. Item November December January Februay W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 W1 W2 W3 W4 Schedule of the study 1 Work in Japan 2 First trip to Jakarta 3 Interim report Interim Reporting 4 Preparation of the report (draft) Submitted on 1/11 5 Preparation of the report (final) 6 2nd trip to Jakarta 7 Reporting at Jakarta 8 Final Reporting Final reporting 9 Submission of final report Submitted on 2/21 Remark : Work in Jakarta Work in Japan 2-5

37 Chapter 3 Justification, Objectives and Technical Feasibility of the Project

38 3.1 Background of the Project The Greater Metropolitan Area extending from West Java province to Banten province become significantly important center of various industries and have 36% of GDP in total of Indonesia (in 2008, except oil and gas ). The port of Tanjung Priok is functioned as only international commercial port at this area and handled 3.8million TEU in 2009 for the containers. The handling capacity is evaluated at 4million TEU and is expected to have a difficulty on handling near future. In this connection, JICA undertook the studies in the international cooperation for port developments as mentioned below, and reported importance of development for the port infrastructure and access roads in order to improve the trade environment and ensure effectiveness of logistics. << The study for development of the Greater Jakarta Metropolitan ports 2003 >> << The study on trade related system and procedures in the Republic of Indonesia 2005 >> To develop introduction of the private investment, the government provided the policy of PPP (Public Private Partnership) in Presidential Regulation No.42 in In respect of Port development, Shipping Law was enacted in April, 2008 and has induced the private investments in addition to separation of port management/port operation sectors, aiming to introduce competition and effectiveness on port management. JICA was also proceeding the study. << The study on the new public private partnership strategy for the port development and management in the Republic of Indonesia 2009 >> Following the previous supports, the preparation of Master Plan for ports developments in the metropolitan area for 2025 is ongoing by JICA. << Master plan study on port development and logistics in greater Jakarta metropolitan area May, 2010 May, 2011 >> Under processing on the above studies, it is a fact that the cargo volume has been increasing rapidly, that requires urgent development plans coping with immediate increase of the cargoes. The projects have been ongoing under Japanese Yen loans in order to improve the port capacity.. << The Urgent Rehabilitation Project of Tanjung Priok Port >> ( Scope : widening and deepening the ship lane. Yen Loan : 12 billion Construction : 2011 ) << Tanjung Priok Access Road Construction Project >> ( Scope : Constructing an access road to Tanjung Priok Port Yen Load : 52.9 billion Construction : 2011 ) In addition to above developments, the urgent construction of new container terminal in Tanjung Priok Port is now under discussion. In compliance with the request from Indonesian government, JICA is now proceeding Pre-F/S on construction at North Kalibaru after review of their ongoing Master plan study on port development and logistics in greater Jakarta metropolitan area. In the same time, the private investment plan by the state-owned seaport operator, Pelindo II is separately proceeding at their own expense for new container terminal of which the opening is aimed in These 2 plans have different scope and implementation schedule but the discussion on unification is not concluded yet. On the other hand, Japanese private firm group consisting of Itochu Corporation and NYK Line intend to participate the terminal management of new terminal and is desiring application of Japanese PPP scheme. Japanese firms opine on management of new terminal that it is essential to work with Pelindo II who is experienced in Tanjung Priok port. However, Pelindo II is going to be one of the terminal operators under new shipping law and may have a difficulty on securing the concession right of new terminal as the established port authority is responsible for competitive selection of the operator under new regulation. To enable Japanese firms to ensure their participation, the development plans should be verified under discussion with the private counterparts and government officials and identified on practicability. 3-1

39 Container Throughput (1,000TEU) This study is processing on construction of new container terminal for Port development plan phase 1 at North Kalibaru for evaluation and shall provide the proposal with action plans from the viewpoints of the private firms in order to ensure implementation. 3.2 Container Cargo Demand Forecast The port of Tanjung Priok has been functioned for the gate-way to support the logistics of the city of Jakarta in Indonesia. The throughput of the containers at the port of Tanjung Priok has been grown at 25 th position among the world ports in accordance with the statistic of Containerlization International In the asia, it reached at 5 th position following china ports incl. Hong Kong, Singapore, Kaohsiung and Tanjung Pelepus. It is forecasted that the throughput has been exceeding 4.7million TEU in Fig Demand Forecast for container throughput at Tanjung Priok Past Record Pelindo Forecast JICA Forecast Year (source : JICA / Pelindo II) The forecast in 2010 shows 4.79million TEU which is increased by 26% (800,000 TEU) comparing with the result in last year with rapid growth. It is opined that the growth of throughput will be continued with confidence.in the Pelindo s projection, the growth curve is similar to JICA study s but the higher growth than JICA s is expected after In comparison with 2 forecasts, it is expected that the throughput in total will increase at 7million TEU in 2014 as earlier and 2016 at least. The handling volume of international containers is resulted at 2.74million TEU for 2009 and forecasted at 3.2million / over 5million TEU in 2010/2015 respectively based on JICA study and our hearing with the terminals. 3-2

40 Container Throughput (1,000TEU) Fig Throughput for International/Domestic containers at Tanjung Priok 20,000 Total Throughput Forecast International Container Forecast Domestic Container Forecast 15,000 10,000 5,000 0 Year (source : JICA / Pelindo II) This strong cargo movements have been attributed to the growth of demand in Intra-Asia trade mainly. After the dull market in the liner business in 2009 due to world economic crisis, the volume of cargo movements in the deep sea trades for Europe and Trans-Pac have been rapidly recovered in the first half of Especially, the Intra-Asia trade have resulted with increase even in 2009 and continuously have steady growth through the economic crisis. It is reported that The Intra-Asia Shipping Agreement for trades covering 12 countries in East / East-south Asia declared 13.5million TEU in 2009 for both export and import and had increase by 8% comparing to 2008 result at 12.5million TEU. Contrary to this development of Intra-Asia trade, Asia-Europe(West Bound) and Trans-Pac(East Bound) trades shows drop of the cargo movements by 15% from 13.5million TEU in 2008 to 11.5million TEU in 2009, and 13.3million TEU to 11.3million TEU respectively. Under above strong development in Intra-Asia trade, the cargo movements for Indonesia also have rapid growth every year. Their Intra-Asia trade volume is consisting of more than 60% of their international trade volume and significant factor to impact their international container volume. (It is reported that the export/import volume in Trans-Pac had only 500,000 TEU in 2010 forecast.) The major trade partners are Japan, China and Thailand for export, and Japan and China for import. 3-3

41 Table Cargo Volume in Indonesia for Intra-Asia Trade TEU ( 予測値 ) Export Japan 169, , ,673 Korea 52,435 49,053 70,474 PRC 77,269 82, ,555 Fujian 5,008 4,357 5,707 Hong Kong 25,260 25,204 32,738 Taiwan 36,015 36,282 51,356 Philippines 41,166 46,010 74,220 Cambodia 3,592 4,018 3,484 Vietnam 42,842 39,315 48,220 Thailand 46,664 44,249 72,544 Malaysia 68,946 56,983 81,084 Singapore 34,394 28,762 42,100 TTL 602, , ,155 Import Japan 142, , ,299 Korea 79,926 77,490 78,401 PRC 262, , ,105 Fujian 22,861 17,870 19,353 Hong Kong 28,309 26,788 26,193 Taiwan 47,215 49,048 51,552 Philippines 17,954 11,778 12,681 Cambodia Vietnam 12,986 15,037 16,182 Thailand 126,463 99, ,094 Malaysia 61,876 58,223 64,247 Singapore 76,348 82,194 86,955 TTL 879, , ,079 Grand TTL 1,481,811 1,341,907 1,632,234 Exp 41% 43% 46% Imp 59% 57% 54% (source : Intra-asia shipping agreement) It is highlighted that the cargo movements between Japan and Indonesia have steady increase under busy export/import of CKD cargo and auto parts etc for Japanese manufacturers developed their production facilities, following to the growth of car saturation. The trade volume resulted more than 300,000 TEU with increase expected. As result of interviews with the carriers, it was found that the mega shipping carriers mainly have relied on the feeder services between Tanjung Priok and their hub-ports for all cargo movements. APL also have set out the local hub port at Tanjung Priok for their cargoes fm/to Padang and Pontianar. Maersk revealed their practical planning on direct call of the deep sea mother vessel at Tanjung Priok was in their study scope, subject to the sufficient port facility. This service plan may induce another opportunity to set out the hub port at Tanjun Priok for cargoes to/from Surabaya and Sumatra if practical. It is confident that the growth of demand become highly potential and ensured. 3-4

42 3.3 Container Terminal Layout Plan Current Operation Total container throughput was resulted at 3.8million TEU in 2009 and estimated at 4.79million TEU in 2010 for forecast. According to JICA study, the international volume is estimated at 2.74million TEU in 2009 and 3.2million TEU in It is expected that this volume will exceed 5million TEU in At present, JICT/KOJA terminals have handled more than 60% of the international container volume through the port of Tanjung Priok with the balance by MAL(International/Domestic terminal) and OJA (International/Domestic terminal). Under berth congestion at north quay of JICT and KOJA which are only acceptable for the vessels with LOA more than 200m, the mid/small sized container vessels have been managed to be along side the quay of MAL/OJA and their international volume has been increasing. JICT/KOJA berthing schedule shows that the north quay of JICT/KOJA have been very busy and occupied at more than 70% on Thursday toward weekend. It is apparent that the berth windows for the LOA 200m vessels have not been sufficient with difficulty to accept additional vessels due to short berthing capacity. The increase of international vessels have been taken care of by MAL/KOJA terminals. This busy situation also has affected the cargo handling of domestic containers vessels and may cause shortage in their domestic container capacity near future. In review of current storage capacity, it is considered that the yard storage capacity of JICT has 2.9million TEU in annual including partial completion of their planned yard expansion. KOJA declared 830,000TEU in annual in interview. It is confident that they will be required to undertake additional measure and plan to cope with the rapid growth of international cargoes in future. In view of shortage of the storage capacity of both terminals, OBX system(shifting the containers to the outside bonded depot) has been functioned well to manage the storage level at the terminal safely. According to our study, the entire capacity of these international container terminals is calculated around 4nillion TEU including MAL/OJA. Considering current growth of international cargoes, the berthing capacity is becoming more critical issue as well as possible shortage in the handling capacity in future. The current berthing ships has been sized at LOA m 25000DWT 2,200-2,500TEU in majority. Some shipping lines have indicated possibility to make direct call by the Post-Panamax sized container vessels with LOA 300m 80,000DWT 7000TEU in future if the berth capacity can accept it Contingency plans undertaken/planned for increase of handling capacity JICT - Yard expansion plan (3.2ha) JICT have proceeded to expand their yard at the east yard next to KOJA, of which some area was partially in operation. This expansion plan will be completed within 2011 and is calculated to increase the storage capacity by 500,000TEU. After completion, the entire yard storage capacity is calculated at 3,400,000TEU level as maximum. New container gates (in-gate) are planed to be built and shared with KOJA in order to increase their handling volume in the gates. ( planned to be completed in 2012 but delayed due to procurement of land area) Table International Container Terminal Summary of Storage Capacity (source : JICT/KOJA/Pelindo II) Terminal Capacity in TEU Remark 1 JICT 1 2,900,000 3,400,000 after expansion 2 KOJA 800,000 3 MAL 300,000 shared with domestic transp. 4 OJA 300,000 shared with domestic transp. Total 4,300,000 4,800,000 in

43 Container Throughput (1,000TEU) JICT - Improvement of Berth capacity The dredging is planned in 2011 in front of West quay 1 (300m) in order to secure the sufficient dept 14m. Post-Panamax QC will be installed additionally in These measures undertaken enable to improve berth congestion and increase berthing capacity to accept the container vessels with LOA more than 200m and heavy draft. In calculation, additional 1 QC is expected to increase of handling capacity by 200,000TEU in annual. They also plan to install additional QC in north quay, that is definitely contributing to not only increase the capacity but also squeeze the berthing time with better berth productivity. It is significantly important that the berthing capacity should be improved continuously by provision of additional/new cargo equipments and operational measures on higher productivity in compliance with yard expansion program. KOJA Additional QC It is an information obtained at interview that KOJA is in study to install additional crane to improve the productivity. MAL/OJA Conversion to International Terminal These 2 terminals have handled both international and domestic containers. It is still under consideration but both terminals will be in exclusive use for international cargoes. Instead, JICT 2 which currently has handled only 1 vessel per week will be shifted to domestic container terminal so that the domestic container capacity can be supported. The above progress/facilities plan to improve the storage/berthing capacity for grown international containers, and the improvement of yard/operational managements undertaken for higher productivity are considered to contribute to increase of the entire handling capacity at the port at million TEU level Capacity New Container Terminal On based on the volume forecast of international containers in JICA study, the current terminals will be fully occupied in Fig Throughput of International/Domestic Containers and Capacity of International Terminals (source : JICA/Pelindo II) 20,000 Total Throughput Forecast International Container Forecast Domestic Container Forecast 15,000 10,000 5,000 0 Year 3-6

44 The throughput of international containers is estimated at 5million TEU in 2015 and 7million TEU in It is suggested that new Terminal is planned to have the handling capacity of 1.9million TEU in consideration to increased capacity of current terminals as of Requirements of the terminal users. The interviews with the current terminal users is briefed as below. Shipping Line A Dec Terminal Plan Berth Capacity 1000 m berth and 10 Post-Panamax QCs are provided in the plan. The berth capacity is calculated based on the data of current operation at JICT/KOJA. Table Assumption of Operational condition (source : JICT/KOJA) Item Unit Length m 1000 QC Crane unit 10 Working Hours per year hours 8,760 Crane Productivity mph 25 Crane Availability Percentage % 95 Berth Occupancy Ratio % 50 TEU Factor 1.5 The berth capacity is calculated by following formula: T = Q x H x P x A x B x TF Where : T : Berth Capacity (TEU) Q : Number of QC H : Working Hours P : Crane Productivity A : Crane Availability B : Berth Occupancy Ratio TF : TEU factor Berth capacity is ; 1.56million TEU / 1000m berth This capacity is proposed on the terminal plan at the initial stage and subject to implementation of additional equipments and improvement of operational efficiency following to increase of the handling volume. Terminal Layout The area of terminal is proposed at 550,000 m2 (55ha) with berth length 1000m and width 550m except the access road in front of the terminal. The quay/apron, marshalling yard and backyard are calculated as follows; Area of Quay/Apron 3-7

45 The required area of Quay/Apron is calculated on the formula below; A = ( L1 + L2 + L3 ) x B Where: A : Area of quay/apron ( m2 ) L1 : Distance between quay and crane rail (m) 3m L2 : Span of crane rails (m) 30.48m L3 : Distance of back reach (m) 35m B : Length of berth (m) 1000m The required area of Quay/Apron is shown in Table Table Area of Quay/Apron Item Unit Distance from Quay to Stack m Quay Length m 1,000 Area of Quay/Apron m2 68,480 (6.9ha) Area of Marshalling Yard The required marshalling yard is calculated on the formula below; Required number of storage containers is: Where: Required ground slot is: M1 = ( My x Dw / Dy ) x P M1 : Required number of storage of container (TEUs) My : Annual container throughput (1,900,000 TEU) Dw : Average dwelling days (6 days) Dy : Operating days (365 days) P : Peak ratio (maximum storage ratio) (1.2) S1 = M1 / L Where: Required area of ground slot is: S1 : Required ground slot (TEUs) M1 : Required storage of containers (TEUs) L : Stacking height of containers (4 tiers) Gy = { S1 ( 1 h ) x i1 } + { S3 x i2 } Where: Gy : Area of ground slot ( m2 ) 3-8

46 Required area of marshaling yard is: S2 : Ground slot of Dry Containers ( m2 ) h : Ratio of Reefer Container ground slot (10%) S3 : Ground slot of Reefer Containers (S1 x h) ( m2 ) i1 : Unit area of Dry Container (14.9 m2 ) i2 : Unit area of Reefer container (19.5 m2 ) B = Gy x J Where: B : Area of marshalling yard ( m2 ) J : Marshalling area factor (conversion factor to the area including yard path) (3.0) The required area of marshalling yard is shown in Table Table Marshalling Yard Item Unit Annual Container Throughput TEU 1,900,000 Ground Slot in Total TGS 9,370 Area of Ground Slot m2 144,000 Area of Marshalling Yard m2 432,000 (43.2 ha) Area of Backyard The following facilities and floor areas are proposed to be built at the backyard. Main building/dock house/customs office Equipment maintenance shop/repair yard/gas station Gate ( 12 lanes ) Container repair shop/cleaning area 3,500 m2 4,000 m2 1,200 m2 2,300 m2 The area of backyard is calculated on the formula below: C = B x K C : Required area of backyard ( m2 ) B : Area of the facilities ( m2 ) K : Backyard area factor (conversion factor to area including yard path) ( 4 ) The required area of backyard is shown in Table Table Area of backyard 3-9

47 Item Main Building/Dock House/ Customs Office m2 3,500 Equipment Mainternance Shop/ Repair Yard/Gas Station m2 4,000 Container Gate (12 lanes) m2 1,200 Container Repair/Cleaning area m2 2,300 Total facility floor area m2 11,000 Area of Backyard m (4.4ha) The summary of the required Terminal area are shown in Table Table Summary of Terminal area Item Unit Area ha Quay Apron Area m2 68, Marshalling Yard m2 432, Backyard m2 44, Total m2 544,

48 Fig Terminal Layout 3-11

49 container vessel 50,000 DWT 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS Reefer 6 x TGS Conatiner Repair Shop Sub- Station Gate House 1000m container vessel 50,000 DWT 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS Reefer 6 x TGS Main Building & Offices Equipment Repair Shop & Yard container vessel 50,000 DWT 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS 6 x TGS Reefer 6 x TGS Gas Stand 6 x TGS Reefer 6 x TGS Reefer 6 x TGS 550m 50m Quay/apron The Post-Panamax QCs with rail span of 30.48m are to be installed at the apron. The width of apron has m. The condition of more than 4-5 QCs working in parallel for one vessel is considered. After the 3-12

50 hatch covers are removed and stored at the back reach, the running space of yard trailers behind QCs is ensured sufficiently for 2 way traffic. The rest house for the gang and the gear storage house for loading/unloading gears etc are located near the fence at the side passage. Marshalling yard Marshalling yard is consisting of 3 yards, of which each have 13 lanes of 42 bays x 6 slot stacking area in principle in consideration of operational efficiency in future development. Currently, OBX system (shifting/storing the laden import containers at the outside depot.) is supporting the yard storage system. The dwelling time in calculation is set out in 6 days (50% addition to current average time) due to maximizing storage at the terminal yard. The empty container storage space is not planned separately as the empties have been shifted to the carriers ECD(empty container depot) immediately after discharge under current operation. The storage of empties are to be managed at the vacant space of the yard when necessary. Also, the space of transshipment containers is not included in the plan due to lower ratio (less than 2-4 %) and is required to be managed in the similar manner as empties. The centre passage between 3 storage yards blocks is planned with 50 m in width including turning space of RTGs. The side passage has 50m in width in view of the waiting space in queue of the customer trailers for gate-out/traffic management in the yard. Storage of Reefer container JICT/KOJA have managed storage of reefer containers with provision of less than 500 reefer plugs. The storage space is planned at 10% of total TGS ( 990 plugs). Facilities at the backyard The new terminal layout plan is essential to perform higher berth productivity and operational efficiency in loading/unloading operation/marshalling for that. Therefore, the facilities at the backyard are minimum and the space is allocated to the apron/marshalling yard with priority. CFS is not planned due to no facility at current terminals. Container Gate The number of gates are planned at 12 lanes which is required at least in view of current gate congestion of JICT for 10 lanes. JICT has the issue of slow turn time of the customer trailers (1.5 hours in average) and long queue inside/outside terminal in the peak due to customer s inspection and formality etc. The number of gates should be reconsidered after review. 3.4 Port Plan Review of current situation At the port of Tanjung Priok, the international containers have been handled in JICT 1, JICT 2, KOJA and MAL mainly. As JICT 2 has shallow berth depth (8.6m), the Panamax vessels currently have been berthed at JICT 1, KOJA and MAL. The recent increase of international containers has caused congestion of the berth at these international terminals. OJA/MTI also have handled the international containers as well as the domestic containers. The location of these terminals are shown in Fig as well as the outline. Fig Current Port layout at Tanjung Priok 3-13

51 MAL JICT-2 JICT-1 KOJA MTI OJA ( source : study team) Table Outline of Current terminals ( for international containers) Name of Terminal Quay Cargo Handling Equipment Quay Length Depth QC Yard Eq. Yard Size -12 m West 900 m 8 QCs 45 RTGs -14 m North 720 m 8 QCs 111 HTs JICT Terminal 1 2 Unit Over Frames 4 Reach Stackers 5 Side Loaders 9 Forklifts 40 ha -8.6 m 510 m 4 QCs 11 RTGs JICT Terminal 2 18 HTs 2 Unit Over Frames 9.4 ha -14 m 650 m 6 QCs 21 RTGs KOJA Terminal 40 HTs 49 Chasis 1 Super Stacker 22 ha MTI (Multi Terminal Indonesia) -9 m 404 m 4 QCs 11 RTGs 6 ha MAL (Mustika Alam Lestari) -12 m 258 m 3 QCs 10 RTGs m 300 m 4 QCs 33 HTs OJA (Olah Jasa Andal Terminal) 2MCs 10 Reach Stackers 5 RMGCs 9 RTGs - note) QC: Quay Crane MC: Mobil Crane HT: Tractor Head ( Source : JICA / Pelindo II ) Ongoing development of port expansion project 3-14

52 << Urgent rehabilitation project >> This project is one of ODA projects with a yen loan and was adopted at L/A of yen 12,052 million in As of December, 2010, the project is proceeding at the tender process. The work scope of the project includes expansion of access seaway to the port (1 lane to 2 lanes), construction of new breakwater to ensure the sufficient ships turning space in front of JICT 1 after removal of the current breakwaters and dredging at the channel and turning circle (depth 14m). The project will be completed in March, 2014 after the construction work for 39 months, subject to commencement in early The construction layout plan was shown in Fig Fig Urgent rehabilitation project at Tanjung Priok New Breakwater Dredging -14.0m MAL JICT-2 JICT-1 KOJA MTI OJA ( source : study team ) << JICT Yard Expansion Plan >> JICT is proceeding the expansion plan at their own budget in order to expand the yard storage capacity and facility improvement under the schedule shown in below. The plan is consisting of 10 phases, of which 2A and 2B have been completed and partially in operation. The phase 6 and 7 are for construction of new gate terminal. All work is scheduled to be completed in May, Fig JICT expansion plan 3-15

53 ( source : Pelindo II ) Port expansion project under planning << Port development plan at North Kalibaru phase 1 (JICA is proposing to DGST) >> The expansion plan at North Kalibaru phase 1 is shown in below Fig based on JICA progress report in November, JICA have studied 3 proposals including the private investment plan and adopted this plan for their recommendation. This proposal was authenticated at the table of steering committee meeting in DGST on November 25, 2010 and is now under process of amendment in the current Master Port Plan in 2007 ( Regulation of the Minister of Transportation, No. KN59, 2007 ). It is expected to be completed until March, On the plan, 72ha of land is reclaimed off the current port and the quay with 1,200 m in length is constructed. The ships turning circle of 600 m in radius is secured with 15.5 m in sea depth. The access road with bridge in 1,000 m is arranged from the east end of port. Fig Port development plan at North Kalibaru << Port development plan at North Kalibaru (The private investment) >> ( source : JICA ) 3-16

54 The entire program of port development plan ( phase 1-4 ) proposed by the state-owned seaport operator, Pelindo II is shown in below Fig It was planned that the phase 1 construction of terminal provided the quay with 800 m in length and is followed with expansion toward the west by reclamation. The future plan proposes the sea depth at 18 m. The basic proposal was prepared based on the Master Plan in 2007 (Regulation of the Minister of Transportation, No. KN59, 2007). This development was accepted by the Ministry of Transport and is now under tender process of construction after almost completion of design for the facilities at their own arrangement. Fig Port development plan phase 1 4 ( source : Pelindo II ) The ongoing plan in phase 1 includes reclamation of 40 ha at the location near the east of port and the quay with 800 m in length. The ships turning circle (600 m in radius) is provided in front water of the terminal with 14 m in depth in the same specification of urgent rehabilitation project. Fig Port development plan at North Kalibaru (The private investment plan) 3-17

55 ( source : Pelindo II ) Port Plan << Designed Container vessels and berth depth >> The majority of container vessels called currently have the capacity of 2,000 3,000TEU and have been connected to the mother vessels in Asia, Europe and USA trades at Singapore etc. Panamax sized container vessels which occasionally called may have difficulty to be berthed at north quay of JICT 1/KOJA depending upon water tide and draft condition due to shallow berth depth. According to the interviews with the terminals and carriers, it is quite obvious that the port facility to accept the vessel sized in capacity of 3,000 4,000TEU is required at priority as well as Post-Panamax vessels in capacity of 5,000 6,000TEU in consideration for development in next 10 years. The standard Panamax vessels has maximum draft in 13 m shown on Table and have required the berth depth at 14.5 m for design under our study. It is considered that the berth structure should provide 15.5 m in depth due to possible dredging to accept the larger size vessels in future. Just for guidance, current building design of new container vessels tends to have wide and shallow in shape under same capacity and can be accommodated at the berth with 14.5 m in depth, subject to the condition. Under this situation, it is expected the acceptable number of Post-Panamax vessels at berth dept of 14.5 m will be increased in future. Table Standard Specification for container vessels Type DWD TEUs LOA (m) Beam (m) Draft (m) Small size 18,300 1, Medium size 33,750 2, Panamax 59,283 4, Post-Panamax 87,545 5, Super Post-Panamax 101,000 8, ULCS 142,500 12, ( source : JICA report ) << Designed length of berth >> 3-18

56 In reference with current operation records at JICT, the designed length of the berth is studied based on the following berthing plan. The current berthing operation shows m for distance between the vessels with the moorings crossed. Fig Basic design of berthing plan 50m LOA 30m Berth The berthing plan for 3 cases in berth length (800 m, 1000 m, 1,200 m) are considered on the comparison table below for study of the size and a number of vessels to be accepted. Table Berth length and berthing capacity Number of Ships Berthing Bert Length 8,000 TEU LOA=330m 6,000 TEU LOA=310m 4,000TEU LOA=280m 800 m m m ( source : study team ) It is suggested that the berth length is essential to fix the initial investment for construction and is required to be set out appropriately with the berthing capacity. On the table, it is proposed that the berth length of 1000 m should be adopted in consideration to berthing of 3 Panamax type vessels (4,000 TEU) in parallel, or 2 Post-Panamax type veesels or 2 Super Post Panamax type vessels in parallel for future requirement. << Ship s access sea route and maneuvering >> The inbound/outbound vessels currently have been maneuvered at the port for berthing/off-berthing as follows. 1. The outbound vessel to off the berth and sail out on the channel toward the entrance ( shown in 1 ) 2. The inbound vessel to start entering to the port after the outbound vessel leaves off the breakwater ( shown in 2 ) 3. The inbound vessel to be turned off the harbor I for portside berthing ( shown in 3 ) 4. The inbound vessel to be pulled by the harbor tug boats and berthed ( shown in 4 ) It is learned in the interview with the harbor pilot that it takes 40 min 1 hour for sailing out (from leaving at berth to arriving at the entrance of the port ) and 1.5 hours for berthing ( from sailing at the entrance of port to berthing ). The outbound vessels have priority to access the channel under the rule of one way traffic. Total hours from sailing out of one vessel until berthing of next vessel at the same quay is required for hours at least. The operation at one way traffic is certainly affecting the berth window badly and is attributed to berth congestion partially. 3-19

57 Fig Maneuvering the inbound/outbound vessels 2 Entering 1Sailing 3Turning 4 Berthing To the next, the vessels have been maneuvered after urgent rehabilitation project is completed. 1. The inbound vessel to entering the port ( shown in 1 ) 2. The outbound vessel to leave the quay and access the channel toward the entrance ( shown in 2 ) 3. The inbound vessel to be turned near the quay berthed for portside berthing ( shown in 3 ) 4. The inbound vessel to be along side by assistance of the harbor tug boats ( shown in 4 ) The increase of channel routes ( 2 lanes ) and expansion of turning circle area enable for the inbound vessels to approach to the berthing water without waiting outside port. The inbound vessel can start turning and berthing immediately after the outbound vessel leave the quay and sail out. In the case, the total hours is expected to be squeezed to around min as shortest for switching the vessels. Fig Maneuvering after completion of urgent rehabilitation project 2Sailing 1 Entering 3Turning 4 Berthing Basin Plan for North Kalibaru Phase1 Project The plan phase 1 at north Kalibaru is also designed on the same maneuvering procedure as above. The 3-20

58 turning circle in 600 m radius is provided after removal of the breakwater. << Container Yard area >> As mentioned in Container terminal layout, the required handling capacity is designed at million TEU in annual. The reclamation of 1,000 m in length and 600 m in width is planned for container terminal area. << Alternative plan A the private investment plan >> The redesigned layout based on proposal of Pelindo II is shown in Fig below. The berth length extends to 1,000 m with expansion of the berth area by 200 m in north. Fig Alternative Plan A ( source : study team ) The original plan includes expansion of reclamation toward the west in design. JICA study team have commented that the direction of access channel is perpendicular to berth line and is not good for larger vessel in maneuvering viewpoints, especially after expansion in phase 2-4. The following modification is proposed as one of designs for solution. 3-21

59 Fig Modification plan after berth length extends ( source : study team ) Alternative plan B Port Plan in JICA M/P study (MOT DGST) The redesigned plan with berth length of 1,000 m and depth of 14.5 m based on the proposal to DGST and Fig is shown in below. Fig Alternative plan B ( proposal based on DGST/JICA study ) ( source : study team ) 3-22

60 The comparison table for Alternative plan A (the private investment plan) and Alternative plan B ( proposal of DGST/JICA ) is prepared in below Table Table Comparison for proposals of DGST/JICA and the private investment plan Assessment Item Alternative A Alternative B Navigational Safety Consistent Consistency with Urgent Rehabilitation Project Berth face line is perpendicular to the direction of inner access channel, thus it contains some risks for safe vessel maneuverings, and time consuming for berthing /deberthings. Berth face line is parallel to the inner access channel, thus safe maneuvering will be possible. Consistent SEA Cost Obstacle to navigation against fishing boats Elimination of fishing ground Impact on water quality of port basin Involuntary resettlement Fishing boat can sail through the gap between new reclamation land and shore. A part of shallow fishing ground for shell aquaculture will be eliminated. Some water stagnation may be caused, which require further assessment by means of numerical simulation. No obstacles No influence to the existing fishing ground. Water exchange (in-port/out-port) will be secured to prevent water quality degradation Warehouses and tens of residential Tens of residential houses are required houses are required to be re-settled for to be re-settled for the access road. the access road. 770 Million USD 789 Million USD note: SEA: Strategic Environmental Assessment : negative evaluation description As mentioned on the above table, it is suggested that the risks of ship s maneuvering, compensation with fisheries due to reclamation and possible water contamination due to water stagnation become the dispute issues. On the other hand, Pelindo II already obtained the authorization of original plan by MOT and is proceeding to tender process and facility design. In view of this progress, the analysis of costing and finance etc is undertaken for both proposals. 3.5 Conceptual Design: Port Facilities General This section deals with a conceptual design of the following facilities: Dredging of Channel and Basin (Ensure safe water depth for large vessels) Breakwater (Demolition/ Extension of existing breakwaters) Reclamation and land development (Procurement of sand materials near the site, Soil improvement to minimize settlement) Quay Wall (Safe and rigid structure for container berthing) Revetment (Surrounding the reclamation area to protect the land from rough seas) In order to conduct a conceptual design of the major port facilities, the following information need to be considered, which should be well harmonized and tally with each other. Construction plan of the Urgent Rehabilitation Project currently in the bidding process (Dredging of channel and basin to -14m, Expansion of basin area, Demolish and transfer of the existing breakwater) Masterplan recommended by the JICA team (Development plan of North Kalibau, Structural type and construction method) Construction information bid-out by Pelindo (Construction plan, structural type and their schedule) 3-23

61 In addition, the following are noted to be considered: The project site is prone to very soft soil conditions which will show remarkable settlement. With respect to the great volume of fill materials required for reclamation, quarries to provide sea/land sand are unavailable near the site (Only available at Bojonegara 100km to the west, or Beliton Island 370km up-north) Congested vessels in/out the existing port, and the current port operations should not be affected Design Conditions Natural Condition Tide Level HHWL (Highest high water level) m (MSL m) MHWS (Mean high water spring) m (MSL m) MSL (Mean sea level) m (MSL m) MLLWS (Mean low water spring) m (MSL m) DL (Datum level) m (MSL m) Note:DL = LLWL (Lowest low water level) Wave Condition Direction Offshore Period Wave at Breakwater (m) ( N) Wave (m) (sec) 310~ ~ ~ Source: Urgent Rehabilitation Project Soil Condition Geology in the area of North Kalibau / Tanjung Priok Port is characterized by thick and soft clayey soils prone to settlement. 5 m to 8 m below seabed appears very soft clay (N value = 0), then silty layers with slightly increasing N values. Below the depth of -24m below is the hard strata with dense silty sand layer. The existing soil data in this port are shown below. 3-24

62 Fig Location Map of Existing Soil Surveys 3-25

63 Fig Soil Conditions at Project Site Seismic Condition Seismic Horizontal Coefficient : Kh = Kr x Ki = 0.05 x 1.5 = = 0.10 Where, Kr:Regional Seismic Coefficient Ki:Importance Factor Operational Conditions Objective Vessels Objective container vessels for this project shall initially be the Panamax type, however larger vessels of Post-Panamax type shall also be considered in the near future. Therefore design of the quay wall shall be made to accommodate the Post-Panamax vessels. 3-26

64 Table Dimensions of the Objective Vessels Container Vessel DWT TEUs Loa (m) B (m) Draft (m) Remarks Small size 18,300 1, Medium size 33,750 2, Panamax 59,283 4, Objective Post-Panamax 87,545 5, Future Berthing Condition Berthing conditions by type of container vessels are shown in the table below. Tab Berthing Conditions Vessels Berthing Speed (cm/sec) Berthing Angle (deg) Small Medium Panamax Post-Panamax 10 8 Surcharge Load Weight of Quay gantry crane Rail span 30 m Rated load 41 ton Self weight 1,300 ton/crane Surcharge load on Apron At Ordinary condition At Extra-ordinary condiiton 1.0 t/m2 2.0 t/m Design of Dredging Dredging is to maintain safe depth in the approach channel and basin in the port. Required depth shall be DL -14.5m to ensure Panamax type container vessels. Dredging volume is calculated for each Alternative A and B. Fig Area for Dredging & Reclamation by Each Alternative Alternative - A 3-27

65 Alternative - B Major work of dredging is to deepen the basin to maintain the depth of -14.5m (blue areas above). The dredged soil is normally disposed in the designated offshore dumping area (26km away from the shore). However considering the difficulties to locally procure sea/land sand, the use of dredged materials for reclamation is thought to be very advantageous, if the materials are suitable. According to the soil data, upper layers are with thick and soft clays, below which (generally below -10m) are with relatively dense silty sand layers. Such suitable materials shall be used for reclamation in lieu of offshore dumping. Areas for reclamation (orange areas above) also have thick soft layers which will cause large settlement after a surcharge by reclamation. To minimize such settlement, the upper soft layers shall also be dredged (for disposal) and removed to the depth of -7m to -8m. The dredging will be done by deploying the following dredgers in conformity with the site conditions. Cutter Suction Dredger (Applied to basin dredging and for reclamation) 3-28

66 Grab Dredger (Applied as supplemental) The dredging volumes both for offshore dumping and for reclamation are listed below. Table Dredging Volumes Unit: m3 Alternative A Alternative B Remarks Basin Dredging 8.7 Mil 7.7 Mil -10m above (for Offshore dumping) Basin Dredging 8.0 Mil 7.3 Mil -10m~-14.5m (for Reclamation) Sub-total 16.7 Mil 15.0 Mil Dredging at 2.2 Mil 2.5 Mil -7m~-8m above Reclamation area (for Offshore dumping) Total Volume 18.9 Mil 17.5 Mil Design of Reclamation Area for reclamation is approx. 60ha (1,000m x 600m). Both Alternative A and B are in the shallow areas with the present depth of -3.5m to -4.0m. It is definite that without removal of the thick soft layers near the seabed will cause large settlement, which as a result necessitates more time for preloading until the settlement is completed. Therefore the said upper layers in the reclamation areas shall be dredged to the depth of -7m to -8m for disposal prior to reclamation. After the dredging/ disposal, deeper dredged materials suitable for reclamation shall be used for reclamation, by which the majority of the reclamation volume will be procured at site. However the topping sand for preloading shall be brought from such borrow quarries as Bojonegara (100km eastward) or Beliton Island (370km northward) in combination with the dredged sand. The table below shows volume required for reclamation. Table Volume for Reclamation Unit: m3 Alternative A Alternative B Remarks Removal of Upper layer for Dredging/Disposal 2.2 Mil 2.5 Mil Removal to the depth of -7m to -8m Reclamation 4.2 Mil 4.5 Mil Reclamation Top EL+3.5m Pre-loading 1.7 Mil 1.7 Mil Preloading 3.0m thick Total 8.1 Mil 8.7 Mil 3-29

67 Among several methods of soil improvement in the reclamation areas (acceleration of settlement), Plastic Vertical Drain (PVD) method, which is well known and available locally, shall be applied. Plastic drains shall be driven into the reclaimed land at every 1.0m pitch dense enough to accelerate the possible settlement. [Note] One of the newest technologies in the field of dredging/reclamation is known as Pipe Mixing Method. This method was developed and introduced in the Haneda International Airport Project in Japan which is characterized by the following aspects: - Dredge very soft soil by a suction dredger and convey through pressurized pipe lines. - Cement powder is sprayed inside the pipe and mixed with the dredged soft materials. - Mixed materials are conveyed and dumped into the reclamation area. - No offshore dumping is required but re-use the soft soil. - Mixed materials are light (less specific gravity than sand) which lessen the settlement. Deployment of this method in Tanjung Priok Port was carefully studied, however as a result, this will not be advantageous due to the following points. This method is good for very soft materials (like jelly) however not effective for clayey materials (sticky) which appear widely in the port area. Pipe mixing plant and vessels only exist in Japan and are very few. Mobilization of the same to Jakarta costs way high, consequently the unit cost will be too high to apply in the project Design of Quay Wall Quay Wall should be rigid enough against large vessel contacts and earthquakes to ensure safe berthing and to provide apron space for container handling. The quay wall structure is generally selected among the following types depending on the site conditions and in terms of construction cost and period. Steel pipe piles + Concrete deck Steel sheet piles + Tie-back Steel jacket Soil improvement + Gravity caisson (or blocks) It is generally the soil condition that makes critical for the selection of the structural type. Considering the soft geological conditions in Tanjung Priok Port, without doubt, Piled Pier is deemed to be an appropriate solution. Piles driven into the hard strata will avoid future settlement. This type is also recommended by the JICA Team. Therefore Steel pipe piles + Concrete deck shall be applied. In the conceptual design, comparison of two critical external forces namely, i) Rubber fender reaction and ii) Seismic horizontal force are evaluated. Rubber Fender Reaction The maximum vessel (87,545 DWT) at a berthing speed of v=10cm/sec will generate the following values: Berthing energy E = 57 tm, Fender reaction R = 100 ton The size of fenders will be selected among H 1250~H-1450 in outreach height. Seismic Horizontal Force Seismic horizontal force (Kh = 0.10) when a quay gantry crane is placed on one of the concrete decks will be the most critical condition. The size of the steel pipe piles are designed at this critical force. As the result of conceptual design, the typical section of the quay wall of piled pier is shown below. 3-30

68 Fig Typical Section of Quay Wall (Piled Pier) 3-31

69 3.5.6 Design of Revetment Revetment protects the reclaimed land from rough seas and waves. Revetment needs to surround and close the area to be reclaimed prior to dumping the reclamation fills, therefore the period for this construction will be critical over the overall construction program. The type of revetment shall be conventional made of rock mound and covered with armor rocks. The rock materials are available locally. The same type is applied in the Urgent Rehabilitation Project as well as recommended by the JICA Team taking into account the low cost and fast construction. The same concept and typical section will also be applied in this project, however a 10m wide buffer zone with mangrove planting is proposed from an ecological view and amenity purpose. This zone will protect the land from overtopping splash and sea wind. Major dimensions of the revetment are as follow: Revetment along North Crown Top m Armor Rock Wave Dissipating Block 2 ton/pc Soil Improvement CDM (Cement Deep Mixing) Revetment along East Crown Top m Armor Rock 0.5~1.0 ton/pc Soil Improvement CDM (Cement Deep Mixing) Fig Typical Section of Revetment (North Side) 3-32

70 Fig Typical Section of Revetment (East Side) In this project site, soil improvement is indispensable under any filling works such as rock mound to avoid settlement. Comparison study was made for several improvement methods a shown in the table, as a result, Cement Deep Mixing method (CDM) is recommended to apply underneath the revetment. CDM will contribute to lessen the construction period and minimize settlement. Table3-5-5 Comparison of Soil Improvement Method Type of Soil Improvement Excavation / Sand Replacement Rock Mound Excavate & Sand Replacement Features & Evaluations none of the most typical methods and is also applied in the Urgent Rehabilitation Project, however due to unavailability of borrow sand nearby to meet as against the big volume required in this project and high cost, this method is not recommended. Moreover future settlement cannot be avoided. Vertical Drain Rock Mound P.V.D. Numerous plastic drains or sand drains are driven into the soft seabed at a certain pitch which will compulsorily accelerate the settlement by surcharge fills. It is low cost and typical in Indonesia. Require some months until after settlement by rock mound surcharge will be completed. Therefore disadvantageous in a project that has time constraint. 3-33

71 CDM (Cement Deep Mixing) Rock Mound C.D.M. Cement Deep Mixing method is to directly mix cement into the soft clayey soil and harden it. The hardened portion will be durable enough to accommodate heavy gravity blocks and no settlement will be expected. It is costly due to mobilization of CDM plant vessel, however ensure relatively fast construction. Therefore after the hardening, rock mound and reclamation works can be done promptly and smoothly, which is advantageous in this project. Bamboo Pile/Mat Rock Mound Bamboo Piles This is a method developed locally. Numerous bamboo piles are driven into the seabed and bamboo mat is placed which will support the weight of rock mound. Introduced in Jakarta Fishing Port too. Bamboos are available locally. Less durability compared with other methods, however is thought to be advantageous to apply to non-permanent portion Design of Breakwater Breakwaters are necessary to protect against the prevailing waves from north to north-east directions in order to ensure calmness in the basin and to increase workability of port operations. Planning and layout of breakwaters should tally with the ongoing Urgent Rehabilitation Project that is to demolish and transfer the existing breakwaters. Breakwaters in this project plans to extend the Dam Tenga by L = 1,500m as shown in the figure (in green). The section will be the same as the Urgent project since the wave conditions are the same. This extension however is a temporary protection and will be subject to demolition in the future phase(s). Therefore necessary soil improvement will be the one with bamboo piles and mat to save cost. Fig Typical Section of Breakwater (Extension of Tengah 1) 3-34

72 3-35

73 3.6 Conceptual Design for Access Road The review for the private development plan of PELINDO II has been carried out with technical respect in this section. The object is access road plan for connection from extended port terminal to Tanjung Priok Access road (hereinafter called TgPA.), the purpose is to propose improvement measure of the plan for Feasibility Study in next step Summary of current plan The General Development Plan is as follows. The object route passes on the Kalibaru Beach from Start Point to End Point, that is shown in the following figure. As this area has crowded houses and warehouses, this route reduces that impact. However, Kalibaru Beach has been used as mooring space for small crafts, it is necessary to confirm the effect for that function by passing. PELINDO II has not kept tabs on the actual condition. Fig General Development Plan of PELINDO II End Point Karlbaru Beach Source PELIND Start Point Photo

74 3.6.2 Current condition and arrangement of control points Control points which should be considered for planning has been set out in this section. a) Land use condition Land use condition and hearing investigation about that possession were carried out for the object area. That result is shown in following figure. Fig Current condition of land use General house and warehouse Oil and gas companies Container yard parking space Car terminal Other companies and factories Location of access road by PERINDO There is no setting space for new access road in this area because of installed big oil and gas companies important equipments and crowded house and warehouses. Therefore it is necessary to set the space with existing roads and container yard which take effect by passing the route is not so serious in comparison with other equipments b) Traffic network Existing roads and designed highway are shown in following figure. Full lines mean existing road, dash line means under construction. 3-37

75 Fig Existing roads and plan of TgPA Regend Public road Karibaru beach Private road Under construction Photo-3 Photo-4 Photo-2 Tanjung Priok Access road Photo-1 Photo 3-2 Photo 3-3 About 8m Photo 3-2 Photo 3-4 About 6~7m About 5~6m Photo 3-4 Photo

76 c) Related port equipment c)-1 Channel Current Channel of Tanjung Priok are shown in right figure. But Channel-2 has not been used now, that function will not be recovered in extended terminal plan by PELINDO II. So only hatching area has been concerned for planning. But the route which crosses channel has not been passed over for increasing construction cost and taking access control. Channel-1 Fig Location of channel Channel-2 c)-2 OIL JETTY The Oil Jetty locates in east side of Tanjung Priok as shown in following photos. But it will not be concerned as a control point because of relocating in near future. Photo 3-6 JETTY(from midair) Photo 3-7 JETTY(from near side) d) Others d)-1 Clearance It was confirmed by hearing investigation to PELINDO II that it s not necessary to concern passing case of special type such as high crane vehicle. According to Indonesian standard, so minimum value is set as 5.5m. But the value 5.5m has been applied as final clearance in plan of PELINDO II. Therefore this study also applied clearance 5.5 m which keeps a little margin for overlay. 3-39

77 d)-2 Horizontal alignment of TgPA Horizontal alignment of TgPA which is connected with access road is shown in following figure, The value of radius curve is 300m. It is necessary to satisfy some rules for connection with ramp and main road such as minimum radius curve and distance between nose and nose. In chapter 3.6.4, it has been confirmed. Radius Curve = Design standard Standard Specifications for geometric design of urban roads published by the Directorate General of Highways of the Ministry of Public Works in March 1992 are used as the main design standards for the design of the access road. AASHTO and Japanese standard are referred for some lack part of detail rules about interchange. a) Character of access road In case of connection between new terminal and TgPA, there are 2 ptterns of setting policy. l) It is connected with extension of main road or ramps as a part of main road. ll) It is connected with existing roads such as extension and widening. The biggest difference point is to set as private road of Terminal or public road for terminals and neighborhood. In this study, recommended plan is decided by considering economic and comprehensive perspective. b) Design speed Design speed of above cases has been set as 40km/h for keeping latitudinous design because of unnecessary of high speed. In Indonesian standard, it might be applied as 50 or 60km/h, these value are excluded by above reason. 3-40

78 c) Geometric standard Geometric standard based on 40km/h is shown in following list. Table geometric standard (V=40km/h) Ramp Exsiting Road Note design speed(km/h) Radius Minimum(m) (exceptional) 40 - Super elevation max(%) 10 6 Gradient(%) 6 7 (exceptional) Length is limited. Vertical curve Crest(m) Vertical curve Sag(m) Vertical curve minimum length(m) Sight distance(m) Passing Sight distance(m) Source: Standard Specifications for Geometric Design of Urban Roads d) Location of IC connection When ramp connection is designed in IC, it must consider ramp terminal criteria and distance between two ramps. This part is not included in Indonesian standard, it has refer Japanese standard based on AASHTO. In this case, design speed of TgPA has been assumed 80km/h as urban Expressway. According to following list, it is clear not to satisfy limit value of ramp terminal, therefore it needs to avoid to set connection around this section. In addition, extension ramp to far side increase in cost. Table Limit value of ramp terminal area(v=80 and 60km/h) Class-2 Design speed(km/h) Radius curve(m) Gradient(%) Vertical curve Crest(m) 9,000 4,500 Vertical curve Sag(m) 6,000 3,000 Source: Road construction ordinance (Japan) Fig Plan of TgPA Note Nose of off ramp Radius Curve = 300 To keep distance min 120m Nose of on ramp On the other hand, in case of continued ramp nose, it keeps minimum distance for driver s safety. According to following list, minimum value is 120m even if it applies minimum case. According to fig , it s possible to set off-ramp, but on-ramp has much constraint such as limit area for connection, current design plan of original ramp. It needs to replace of on-ramp or combine with original ramp. 3-41

79 As a result, it was decided that connection with TgPA at this section was not suitable because of large effect to current plan and around this area. Fig Limit of length between two ramps Design speed (km/h) 64 to to 113 Running speed (km/h) 60 to to 93 L - minimum (m) maximum (m) Source: AASHTO Japanese standard Cross section Number of lanes has been decided based on other project report The Project of Master Plan Study on Port Development and Logistics in Greater Jakarta Metropolitan Area 20,600(PCU/day) / 13,000 (Standard Design Daily Traffic) = 1.58 a) Basic cross section for ramp 断面 A-A Fig ramp separated for bridge S=1: section ,000 3,500 1,500 3,500 1, ,500 In case of over 50m for bridge section, width of shoulder applies reductive value. 3-42

80 Fig lanes for embankment S=1: section 200 1,500 2,000 断面 D-D 3,500 14,000 3,500 1,500 2,000 断面 D-D Figure lanes for bridge S=1: section ,500 1,500 1,500 3,500 3,500 1,500 In case of over 50m for bridge section, width of shoulder applies reductive value and pedestrian is set on one side. Basic value of carriageway is 3.25 or 3.0m, but many big size vehicles will use this road. Therefore value 3.5m has been applied Route Plan Based on the data which were classified after 4)-2, comparison route study is carried out. Following three routes have been set. A route : Alternative-1 It uses some existing roads such as Jalan Kari Baru Barat and MEDCO Private Road, decrease s remove of neighborhood. This route has many horizontal curves for adjusting with existing road. Although it has a subject of grade intersection with Jalan cilincing Raya, it is superior for aspects of accessibility from neighborhood, economic efficiency and construction. B route : Alternative-2 It also uses a existing roads Jalan Kari Baru Barat 12, decreases remove of neighborhood. This route hits many buildings such as houses and warehouse on grand area. It s similar in setting policy to A route, but running performance is superior for using long straight line. C route : Original This route is the shortest, the number of remove is the fewest. Although accessibility is very high for connecting between new terminal and TgPA as ramp directly, convenience of neighborhood is the lowest. And this route passes on the KAribaru Beach, but recover of that function is not considered in present stage. In addition, the connection with TgPA has technical problem such as 4)

81 The comparison table is shown in next page. It is described in 4)-3-a), priority is changed by setting a character of that road, it gives effect to recommend plan. In this study, accessibility and traveling performance are evaluated as important items based on PELIND ll design plan. But this original route has many subjects such as economic, construction and adjustment with TgPA, Finally it was evaluated that C route was inferior to other route. As a result, A route is recommended by this study. But A route has a subject of disposal for grade intersection, it is very important. It is necessary to manage traffic flow by signal or traffic police for avoiding to make a bottleneck of traffic. 3-44

82 Route name A route B route C route A route B route C route General view Length fill: 1,100m bridge 350m fill: 800m bridge 350m fill: 0m bridge 910m (on grand:210 on the sea700) (IC ramp is assumed as 900m) Cost comparison ratio Replacement required house/warehouse: 47 factory/company:3,000m2 house/warehouse: 52 factory/company:2,400m2 house/warehouse: 25 factory/company:2,300m2 Accessibility to TgPA B:It's possible to access to TgPA from neighborhood through existing road. B:same as on the left A:It is connected directly. Running performance Convenience of neighborhood Construction C:It has many horizontal curves to adjust with B:no problem existing roads. A:It's possible to access fromn eighborhood and B:It's possible to access from neighborhood. existing terminal area. A:It is superior to use existing roads and bridge B:no problem section is the shortest A:it has good horizontal alignment and has perfect access control. B:It's impossible to access fromn eighborhood. But this is a part of precondition. C:It takes long time because of long bridge section on the sea and complex IC connection Others It is necessary to manage traffic flow by signal or traffic police for avoiding to make a bottleneck of traffic at grade intersection. same as on the left It need to adjust with lerated agencies ASAP because of having difficult limitted control at IC connection.. Recommend A:It's superior clearly. B:it doesn't have important subjects C:It has important subjects and requires adjustment. 3-45

83 3.7 Justification of the Project Container Cargo Demand Forecast This report referred two different studies for container cargo demand forecast conducted by JICA Study Team and a private consultant hired by Pelindo II. Both forecasts indicate similar result showing approximate 7 million TEU throughput by 2014~2016. Looking at the international container throughput, present figure in 2009 was 2.7 million TEU and it is foreseen to increase to 5 million TEU by This strong growth of cargo volume in Tanjung Priok Port arises from mainly active demand Asian route shipping and increasing foreign manufacturers investment on many industrial estates located in the suburb of Jakarta. Major shipping companies such as APL or Maersk Line are beginning or considering the transshipment services using the port for regional hub-port Container Terminal and Port Plan The present capacity for international container handling at Tanjung Priok Port is roughly estimated at 4 million TEU. However the following projects are scheduled to increase the capacity of the port. - New expansion of container yard 3.2 ha (JICT) - Dredging quay-wall to -14.0m at JICT west berth (JICT) - Installation of new quay cranes, 1 on north berth and 1 on west berth (JICT) - Installation of new quay crane (KOJA) - Change domestic terminal to international (MAL/OJA) and improve domestic terminal instead (JICT 2) This study estimates the future total handling capacity of existing terminals for international container at 4.5~5.3 million TEU by Taking into account this capacity and the aforesaid demand forecast, operation of new North Kalibaru Container Terminal should be commenced by The required capacity of new terminal is estimated at 1.9 million TEU considering the time for further development of regional port master plan. The followings are the basic dimensions of the port and terminal plan. - Port basin : m deep - Quay length : 1,000 m - Reclamation land : 1,000m x 600m (60ha) - Terminal size : quay apron 6.9ha, marshalling yard 43.2ha, back yard 4.4ha (54.5ha in total) - Quay crane : 10 units For terminal location, two alternatives are discussed in this report. Alternative A is the plan that Pelindo II proposed and is beginning contractor s tender process by its own finance at present. Alternative B is the plan that JICA Study proposed and DGST is in the government approval procedure. Two plans are further discussed in Chapter 5 for financial and economic analyses and chapter 6 for implementation schedule Conceptual Design The points worthy of special mention for conceptual design are as follows. - The existing soil data shows that seabed surface material is soft which should be disposed off-shore, but lower strata approximately below -10.0m might be re-used for reclamation material. This report recommends such use of dredged material with respect to project cost saving. - Reclamation land and revetment require soil improvement works. CDM method is proposed for foundation of revetment which has advantage of high quality and to shorten construction time. PVC drainage method is proposed to accelerate consolidation of sub-soil. - For quay wall, steel pipe pile foundation and concrete deck structure is proposed. This is very common to design berthing facilities for container vessels at -14.5m deep sea ports. - Access bridge is designed to carry two lane traffic with 5.5m clearance height above water surface allowing small fishing boats passage. - Land access road is connected to on-going TgPA elevated road project passing surface level road. The west rout (Rout A) is recommended considering access from existing terminal, minimum re-settlement of residential houses, and construction cost. 3-46

84 Chapter 4 Evaluation of Environmental and Social Impacts

85 4.1 Survey on Existing Matters of Environment General The target area of this study is around the port of Tanjung Priok, because the subject of this survey focuses on the phase I of development plan of Tanjung Priok Port. The port of Tanjung Priok was built more than 100 years ago, and now it is the most important port in Indonesia. In the Tanjung Priok port, the employment of around 30,000 people has been produced and in the Kalibaru fishing port, which is at the east side of Tanjun Priok Port, approximately 2,000 fishermen have lived. In sea area of the Tanjung Priok port, the water pollution is seen as problem. Therefore in this development plan for the new container terminal neighboring inhabitants and environment should be considered. At Marunda, east area of this project site, there is the forest reserve area (Protected Area), but no Protected Area and Preserved Area is at this project area. The coastal area is a gently shelving shallow beach and main part of this area is less than 5m but no tidal area. Neither coral reef nor the mangrove exists. According the ecosystem of the target area, the precious birds do not exist and this area has not been appointed in the protected area for birds. Therefore, in this environmental and social consideration study, the impacts on environmental pollution and neighboring inhabitants should be considered in particular Environmental Conditions Water Quality For the water quality of Tanjung Priok port, sampling survey have been performed by the JICA study 2003, 2005 and IPC (2004). According to their reports, the values of DO, COD, TN, TP at low tide are worse than those of high tide, and those at surface water are poorer than those of the deep. In addition, DO was lower than the standard (5mg/l) at inside and outside of the breakwater, and Sunter River estuary was the lowest value (2005 survey). The values of Ammonia, TN and TP as a nutrient outside the port exceeded the environmental standards of Japan and Indonesia (Ammonia: 0.3mg/l, T-N: 1mg/l, T-P: 0.09mg/l). In particular, at the mouth of Sunter River and Ancol River the very high values were observed. For SS concentration, the results at Sunter River mouth did not satisfy these criteria (2005 survey). According to the results of this interview survey with Pelindo, however, the results of regular monitoring of water quality conducted by Pelindo II in 2010 satisfied these criteria. Thus, the current situation of the water quality at Tanjung Priok port is stated that domestic wastewater and industrial wastewater from the two rivers, especially Sunter River flows into and artificial eutrophication are caused Sediment Quality For the sediment quality of Tanjung Priok port, sampling survey have been performed by the JICA study 2003, 2005 and IPC (2004). Inside the port, the concentrations of mercury were high (0.68~0.73mg/kg), but are lower than WB Technical Paper No.126 of acceptable standards (1.6mg/kg, Indonesia quality standards do not contain the standard of mercury). Sediment around the port has been reported to be mud and sand. 4-1

86 Fig Environmental Situation of Tanjung Priok port accumulation Ancol River Sunter River Air Quality For the air quality of Tanjung Priok port, sampling survey have been performed by the JICA study 2003, 2005 and IPC (2004).Emissions gases, such as NO2, SO2 (NO 2 : ug/m 3, SO 2 : ug/m 3 ) and others, met the criteria (NO 2 : 150ug/m 3, SO 2 : 365ug/m 3 ), but TSP concentration (maximum 1532 ug/m 3 ) exceeds the standard (230ug/m 3 ) in Indonesia (JICA2003: all the observation points, JICA2005: several points). Though it was much polluted condition, as interview survey to Pelindo II in this study, the results of regular air quality monitoring conducted in 2010 satisfy that criterion Noise and Vibration For the noise and vibration of Tanjung Priok port, the measurements have been performed by the JICA study 2003, 2005 and IPC (2004). In 2003 survey, the noises that exceeded standards (70dBA) were observed at the west of the port, and in 2005 survey, even at night, the exceeded noise were observed. However, as the results of this interview with Pelindo, the results of the regular noise monitoring in 2010 met standards. Vibrations (0.3~8.1m/s, 2005) measured at all observation points have satisfied criteria of Indonesia (8.5m / s) Social Conditions Land Use This project area is occupied by residential and industrial area. For land use which is planed to set the access road to new container terminal, the following summarized results of visiting the site, interviewing and collecting documents. Fig Land use around project site Notes Houses and Warehouses Gas and Oil Companies Container Yard and Parking Car Terminal Other Companies Water Use 4-2

87 In the east sea of Tanjung Priok port, the neighbor fishermen are living by fishing. In the JICA study 2010 (ongoing), the findings of fishing activities are reported. 4.2 Positive Environmental and Social Impact of the Project With the implementation of the project such as construction of new container terminal and access roads, removal of the existing breakwater, environmental improvement around project site can be considered as follows. However, EIA (Environmental Impact Analysis) should be carried out properly, after alternative layout plans are considered. 1).Improvement for Natural Environment By removing the breakwater at eastside of Tanjung Priok, the flows inside the port are made faster and the sea water are exchanged, improvement for water quality is expected. By making vessels larger accompanied with development of container terminals and increases of routes and anchorage depth, CO2 emissions are expected to be reduced. By development of the access road, it is expected to relieve the current congestion (depends on the road alignment.) 2).Improvement for Social Environment It is expected to hire local residents as workers in the port. So it is expected to improve the lives of residents and create employment opportunities for local residents. With the construction of the new terminal and increase of handled cargos, it is expected to increase industrial and regional development at the hinterland. And then more job creation, local economic developments are expected. 3).Alternative Plans By the implementation of this project, thus environmental improvement is expected, but in addition to PELINDO II Plan of this survey, the plan of "MASTER PLAN STUDY ON PORT DEVELOPMENT AND LOGISTICS IN GREATER JAKARTA METROPOLITAN AREA IN THE REPUBLIC OF INDONESIA "(below, Master Plan) should be compared, and the results are summarized below. Table 4-1 Alternative plans about environmental and social improvements PELINDO II Plan Master Plan Layouts Improvement for Natural Environment Improvement for Social Environment By removing the breakwater and widening water area, partially improvement for water quality is expected. CO2 emissions reduction, relieving the current congestion Improvement for the residential lives and employment opportunities. Industrial and regional development By securing water flow at east side of port, big improvement for water quality is expected. CO2 emissions reduction, relieving the current congestion Same to left descriptions 4-3

88 at the hinterland Evaluate 4.3 Negative Environmental and Social Impact of the Project General Now, the project's executing agency, Pelindo II is waiting for examinations of SEA the three province governments (DKI Jakarta, Bekasi and Tangeran) prepared to be approved from the Ministry of Environment, and preparing the EIA-TOR (KA-ANDAL) of this project. After approval of SEA, following the EIA procedures, announcement to participants and explanation to stakeholders is to be conducted. Therefore, now comparing study of alternative plans is not conducted. At EIA examination, some alternative plans should be considered properly based on comments from residents and committee and the plan that minimizes environmental impact is needed to be considered List of Environmental and social impacts Items and categories of environmental and social impacts are listed in below table. Table List of Environmental and social impacts Category Environmental Item Confirmation of Environmental Considerations (1) EIA and Pelindo has prepared EIA-TOR(KA-ANDAL), and after SEA Environmental approval, EIA exam would be done. Permits 1 Permits and Explanation 2 Pollution Control (2) Explanation to the Local Stakeholders Explanations to the stakeholders have not been conducted yet. After SEA approval, EIA exam would be done. Examinations of alternatives have not been conducted yet. During (3) Examination of EIA exam, opinions from committee and residents should be Alternatives reflected. The current air quality satisfies the criteria, but the examinations whether it meets the environmental standards should be carried out (1) Air Quality in EIA, because it would be affected by increase of passing vehicles with this project. The current water quality satisfies the criteria, but water quality simulations for alternative plans should be carried out in EIA exam, (2) Water Quality because it would be affected by variation of layout of port with this project. The disposal plan of waste materials should be prepared and it (3) Wastes should be strictly supervised to dispose properly during the implementation of this project. The current noise and vibration satisfies the criteria, but the (4) Noise and examinations whether it meets the environmental standards should Vibration be carried out in EIA, because it would be affected by increased of passing vehicles with this project. Due to pumping of groundwater and its compaction, land subsidence under the existing quay occurs, the facilities of this (5) Subsidence project is prospected of subsidence. To reach the fundamental solution seems to be very severe, but better measures should be considered. Odor occurs due to garbage and wastes around Kalibaru fishing (6) Odor port. (7) Sediment Sediment simulations for alternative plans should be carried out in 4-4

89 3 Natural Environment 4 Social Environment 5 Others EIA, because it would be affected by variation of port layout with this project. Indonesia has no quality standards for sediments, so WB standards would be used. (1) Protected Areas No protected areas around project site (2) Ecosystem No mangroves and ecosystem to be protected (3) Hydrology (4) Topography and Geology (1) Resettlement (2) Living and Livelihood (3) Heritage Nothing (4) Landscape Nothing (5) Ethnic Minorities and Indigenous Peoples (6) Working Conditions (1) Impacts during Construction (2) Monitoring Because flow pattern inside and outside the port could be affected by replacement of the breakwater and reclaimed land with this project, the appropriate simulations for alternative plans should be carried out properly in EIA. For waves, waves to reach the Kalibaru fishing port could be reduced by arrangement of landfill. Because much seabed sand is transported in this area, the characteristics of sand transportation would be changed due to variation of port layout. With deposit and erosion of seabed, topography of surrounding area would be changed. With the construction of access roads, resettlement of 50 houses may be required. In EIA exam, the route to minimize number of houses to be resettled should be considered from alternative routes. Depend on layout of the terminal and the route of access road, fishermen of Kalibaru fishing port are limited to maritime traffic. So consultations with local residents should be conducted and their opinions should be reflected in EIA. Nothing Working conditions should be secured following the laws in Indonesia The study about construction work, various vibration and noise, mitigation of water pollution, should be considered in EIA examination. The needs for monitoring of water pollution, vibration and noise should be considered during the EIA exam. Alternative Plans As a comparison of layout of landfill and access roads, Pelindo II plan and Master Plan are compared at the view point of the environmental impact. In the Pelindo II plan, the access road routes are Route A, B and C shown in Table 4. The impacts on the fisheries, water quality of surrounding area and local residents are compared in environmental and social considerations. Table Alternative plans about environmental impacts 4-5

90 PELINDO II Plan A route B route C route Master Plan A route B route C route Layouts Outlines Impacts Fishery Water Quality Residents Reclamation area : Pelindo II plan Road : widening of existing road Reclamation area : Pelindo II plan Road : widening of existing road Reclamation area : Pelindo II plan Road : directly connected to TgPA (Pelindo II plan) Fishery to use aquacultures at reclamation areas should be moved. Fishermen of Kalibaru fishing port are limited to maritime traffic. The piers in fishing port with C route would affect to traffic convenience for fisherman. By removing the breakwater and widening water area, partially improvement for water quality is expected. Polluted materials may transfer to Karibaru fishing port. Number of houses to be resettled with construction of access road : about 50 houses Number of houses to be resettled with construction of access road : about 50 houses Number of houses to be resettled with construction of access road : about 25 houses Reclamation area : Master Plan Road : widening of existing road (same to A Route) No impacts on fishery Due to securing water flow at east side of port, big improvement for water quality would be expected. Number of houses to be resettled with construction of access road : about 50 houses Evaluate Stakeholders At this stage, as the Stakeholders involved in this project, the following organizations are expected. Central Government (Ministry of Transportation, Environment, Marine Affairs and Fisheries) Local Government (DKI Jakarta etc) Fishery Community Residents NGOs Experts Business and Professional Associations Private Company Port Developers and Operators etc In particular, fishermen hope to hold regular meetings to discuss about the waters use around Tanjung Priok port in interviews of this survey. So in the EIA, the opinions of the fishermen should be reflected. 4-6

91 4.4 Laws and Regulations on Environmental and Social Impact of the Country General The laws and regulations on environmental and social considerations in Indonesia, first defined by "Law for Basic Provision for Environment, No.4, 1982", then was amended in "Law for Environmental Management, No.23, 1997". This law guaranteed the right of people to the environment, and regulated the activities affecting the environment. "Government Regulation for EIA, No.51, 1993" was enacted, in the Environmental Impact Assessment (EIA, AMDAL: Analisis Mengenai Dampak Lingkungan) environmental management plan and environmental monitoring plan were needed to be prepared in addition to the environmental assessment report. In 2009, on "Law for Environmental Protection and Management, No.32, 2009", Strategic Environmental Assessment (SEA, Kajian Lingkungan Hidup Strategis: KLHS) had been legalized and at development plan such as this project, SEA was required in addition to EIA. In Indonesia, environmental procedures of SEA and EIA are as follows. Fig Environmental Procedures Policy Policy Ministry of Environment Central or Local Government Project Proponents Plan submission approval SEA:KLHS Master Plan Plan SEA:KLHS Program Program Project submission approval EIA:AMDAL F/S D/D Project EIA:AMDAL Implementation Source: Decree of the Ministry of Environment No.27, 2009 on Guidelines for Implementation of Strategic Environmental Study SEA The Laws and regulations about SEA are as follows. Decree of the Ministry of Environment No.27, 2009 on Guidelines for Implementation of Strategic Environmental Study Law No.32, 2009 concerning Environmental Protection and Management Government Regulation No.10, 2010 on Procedures for Change to the Allocation and Function of Forest Areas Government Regulation No.15, 2010 on Spatial Layout System Arrangement In "Decree of the Ministry of Environment No.27, 2009", while the EIA is carried out at projects stage, SEA is done at a policy and planning stage. This decree does not intend to have duties and responsibility of SEA, but shows the technical concepts and procedures of SEA. Then, by "Law No.32, 2009 concerning Environmental Protection and Management", SEA has been the law, local and central government has been required SEA at their policy, planning. - Long term Development Plan - Medium term Development Plan - Spatial planning spread around national, state and area 4-7

92 - Policies, planning and program that affect the environment EIA The Laws and regulations about EIA are as follows. Government Regulation No. 51, 1993 Law for Environmental Management, No.23, 1997 Government Regulation No.27, 1999 on Analysis of Environmental Impacts Decree of Head of BAPEDAL No.8, 2000 on Public Involvement and Information Disclosure in EIA Process Decree of Head of BAPEDAL No.9, 2000 on Guideline for Preparation of EIA Study Decree of the Ministry of Environment No.11, 2006 on Type of Business Plan and/or Activity Requiring EIA Decree of the Ministry of Environment No.5, 2008 on Works of EIA Appraisal Commission Decree of the Ministry of Environment No.6, 2008 on License of EIA Appraisal Commission Decree of the Ministry of Environment No.8, 2008 on Guidelines for EIA Law No.32, 2009 concerning Environmental Protection and Management In Indonesia, EIA called AMDAL (Analisis Mengenai Dampak Lingkungan), was enacted by "Government Regulation No. 51, 1993". Screening Criteria for EIA of ports, roads and railways is defined in "Decree of the Ministry of Environment No.11, 2006" which are shown in Table 5. This project is required EIA because of dredging, quay, reclamation and access road. Detailed instructions of EIA have been defined by "Decree of Head of BAPEDAL No.8, 2000 on Public Involvement and Information Disclosure in EIA Process" as shown in Figure 6. Based on public information and public involvement, the project proponent need to prepare the following documents to get approval from AMDAL Commission KA-ANDAL(Kerangka Acuan Analisis Dampak Lingkungan): EIA-TOR (terms of reference) ANDAL(Analisis Dampak Lingkungan): EIA Report RKL(Rencana Pengelolaan Lingkungan): Environmental Management Plan RPL(Rencana Pemantauan Lingkungan): Environmental Monitoring Plan The consists of AMDAL Commission are separated by the scale of the project, the international port for central government, domestic port for province government, local port for local government. Table Activity Requiring EIA Category Type of Activity Screening Criteria Port Road Level of Appraisal Commission Capital dredging Volume > 500,000m3 Dredging Dredging on rock Kabpaten/Kota All and/or stone Jetty with sheet pile or open pile Length > 200m or Area > 6,000m2 Jetty with massive construction All Port facility Breakwater Length > 200m Port infrastructure (terminal, warehouse, Area > 5ha container yard, etc) Local port: Mooring buoy Ship > 10,000DWT Kabpaten/Kota Reclamation Area > 25ha or Volume > 500,000m3 Kabpaten/Kota Toll road development Length > 5km Kabpaten/Kota Road Big city/ metropolitan Length > 5km or Kabpaten/Kota International port: central government National port and/or regional port: province government 4-8

93 development Land acquisition > 5ha and/or dilation Length > 10km or City with land Land acquisition > 10ha Kabpaten/Kota acquisition Length > 30km or Rural area Land acquisition > 30ha Kabpaten/Kota Development of under-pass/tunnel Length > 2km Kabpaten/Kota Development of bridge Length > 500km Kabpaten/Kota Railway network Length > 25km Kabpaten/Kota Railway Underground railways All Kabpaten/Kota Terminal development Area > 2ha Kabpaten/Kota Source:1) Decree of the Ministry of Environment No.11, 2006 on Type of Business Plan and/or Activity Requiring EIA 2) Decree of the Ministry of Environment No.5, 2008 on Works of EIA Appraisal Commission Fig EIA Procedure Local Residents, NGOs and Stakeholders Questions, Opinions and Comments Discussion Questions, Opinions and Comments Competent Authority Announcement of EIA Compilation Preparation Review of EIA-TOR s by EIA Commission (within 75 days) Project Proponents Announcement of Project Plan Preparation of EIA-TOR Preparation of EIA Documents Environmental Analysis (ANDAL) Environmental Management Plan (RKL) Environmental Monitoring Plan (RPL) Questions, Opinions and Comments Review of ANDAL, RKL and RPL by EIA Commission (within 75 days) Decision of environmental feasibility by the Head of the Environmental Agency or Governor Revision of EIA Documents (within 14 days) Source: Decree of Head of BAPEDAL No.8, 2000 on Public Involvement and Information Disclosure in EIA Process Land Acquisition Land acquisition system has been developed in following two president decrees. President Decree No. 36, 2005 on Procurement of Land for Implementation of Development for the Public Interest President Decree No. 65, 2006 on Changes of President Decree No.36, 2005 The above decrees stipulated the land acquisition procedures with public works. It was basically based on LARAP (Land Acquisition and Resettlement Action Plan) introduced by WB. Governors and mayors establish the commission for land acquisition and resettlement, the commission determines the compensation based on a survey. Compensation consists of money, alternative land and resettlement or their combinations. 4-9

94 4.5 Actions to be made by the Government for the Project Present Status of SEA and EIA procedures The present status of SEA and EIA on the project is shown below from results of the interview survey. Pelindo is promoting the development plan which is based on Master Plan of the Tanjung Priok port in The three provinces (DKI Jakarta, Bekasi and Tangeran) have conducted SEA survey about coastal area use of the Java Sea, and until December 2010 (or January 2011) will submit SEA to Ministry of the Environment (or their organizations) and plan to get approval from MOE. After approval of SEA, Pelindo would submit EIA (under preparation) to MOE and in three months the development permit would be receive from MOE. On the other hand, DGST plans to reformulate Master Plan of this port in March 2011 based on ongoing JICA survey and then SEA conducted by JICA survey would be submitted to MOE. After approval of SEA, DGST will run this project with detailed design and EIA exam EIA After this survey, EIA concerning about alternative plans should be carried out. In EIA, the Stakeholders Meeting should be held with nearby residents and fishermen affected by the reclamation area and access road, and then development plans should be reflected the opinions from the participants. Also, if the landfill plans have changed, it is necessary to conduct simulation for water quality, and from the view point of environmental consideration, the development plans should be considered through alternative study. Fig Present status of SEA and EIA PELINDO II Policy Ministry of Transport DGST Government Ministry of Environment Province (DKI Jakarta, Bekasi, Tangeran) PELINDO II Plan Master Plan From JICA Master Plan ?/2011 Rapid Assessment Program SEA:KLHS?, 2011 submission submission approval SEA:KLHS 12/ ?/2011 Project EIA:AMDAL?, 2011 submission 01?/2011 submission approval 04?/2011 EIA:AMDAL Implementation Management Plan In Indonesia environmental management plan (RKL) and environmental monitoring plan (RPL) must be submitted with EIA (AMDAL). Therefore, in implementation of this project the proper environmental management plan should be prepared. In general, the environmental management plan continues to be performed during the construction and 4-10

95 operation in order to minimize the negative impact and to maximize the positive impact, and: consists of the following three terms. Mitigation and Compensation: Compensation for land acquisition, construction methods with environmental consideration and reuses of waste materials Monitoring: Interview with project affected people and periodic surveys of air quality, water quality and sediments Feedback: reviewing of construction method and schedule, and implementation of additional mitigation measures, public consultation Monitoring Plan Environmental Monitoring Plan (RPL) is positioned in the environmental management plan, the result is to evaluate whether they exceed pollution levels and criteria and to mitigate the negative effects on natural and social environment during the implementation, construction and operation of the project. Important monitoring items to be expected are shown below with their durations and locations. Table Environmental monitoring plan Category Items Terms of monitoring Duration, Frequency Area Every 6 months construction Air Quality Sampling survey yards on land SO2 CO NO2 TSP and access road Pollution Control Natural environment Social environment Water Quality Sediment Noise and viblations Topography and Geology Resettlemen t Living and Livelihood SS COD BOD Ccoliform T-N T-P Hg As Pb Cr Cd Oil PCB PAH Hg As Pb Cr Cd Ignition loss G-size Measurement directly Bathymetry survey Geology survey Number of houses to be resettled, cost of compensation Every 6 months Every 6 months Every 6 months Every year Before implementation employment, income Every yea - Turning basin and channel dredging area and channel Access road Turning basin, channel and Kalibaru fishing port resettlement area Comment Every week temperature Ph, Salinity, Turbidity, DO during dredging interview survey, data collecting survey 4-11

96 Chapter 5 Financial and Economic Evaluation

97 5.1 Cost Estimate: Port Facilities Preliminary Project Cost Project cost required for the development of Tanjung Priok Port : Phase I for each Alternative A and B are preliminarily estimated and summarized in the following tables. Table Summary of Preliminary Project Cost Estimate Unit: Mil Rp Item Alternative A Alternative B Remarks 1. General Cost 261, ,353 Mobi/Demobi costs, etc. 2. Direct Construction Cost (DC) Ratio Over Ratio Over DC DC (1) Breakwater 402, % 402, % (2) Dredging 1,615, % 1,496, % (3) Soil Improvement, Reclamation Revetment 540, % 480, % Reclamation, Soil 554, % 554, % Impr. (4) Access Bridge & 126, % 359, % Road (5) Quay Wall 825, % 825, % (6) Handling 1,650, % 1,650, % Equipment (7) Yard, Buildings Yard Pavement 692, % 692, % Terminal Bldg. 81, % 81, % Utilities 157, % 157, % Sub-Total DC 6,646, % 6,699, % 3. Admin Cost 930, ,923 DD/ SV, Contingency 4. Total Construction 7,837,778 7,899,727 VAT 783, ,973 10% of 4 Total Project 8,621,556 8,689,699 Eqvl Yen (Mil Yen) 71,252 Mil 71,816 Mil 1 USD = 9,000 Rp 1 Yen = 110 Rp The above summary was broken down into each construction item and foreign/ local portions as shown in the next tables. 5-1

98 Table Preliminary Project Cost Estimate: Alternative A Description Unit Quantity Preliminary Cost Estimate for Container Terminal Expansion at Tanjung Priok (Phase I) Alternative -A : Proposed by Private Investment - Berth 1,000m - Depth -14.5m Cost Estimate (1,000 Rupiah) Local Portion Foreign Portion Combined Remarks Unit Price Amount Unit Price Amount Total 1. General Cost Mobilization / Demobilization l.s. 1 74,755,803 91,401, ,156, % of DC Mobi / Demobilization of CDM Vessles l.s. 1 4,486,680 40,380,120 44,866,800 CDM vessels from Japan Temporary Work Yard l.s. 1 16,000,000 24,000,000 40,000,000 Other Preparatory Works l.s. 1 4,000,000 6,000,000 10,000,000 Sub-total of General Cost 99,242, ,781, ,023, % of DC 2. Direct Construction Cost (1) Breakwaters 402,863, % of DC Construction Dam Tengah Extension m 1,500 60,000 90,000,000 90, ,000, ,000,000 Demolition Dam Citra m 1,900 16,360 31,084,000 24,540 46,626,000 77,710,000 Dam Pertamina m 2,170 16,360 35,501,200 24,540 53,251,800 88,753,000 Jetty m ,000 4,560,000 18,000 6,840,000 11,400,000 (2) Dredging Channel & Basin 1,615,950, % of DC Deepening (-14.0~ -14.5m) m 3 1,800, To be Dredged by Urgent Project, Offshore dumping Deepening for Phase I (~ -14.5m) Basin (~ -10m) m 3 8,700, ,900, ,950, ,850,000 Offshore dumping Basin (-10m ~ -14.5) m 3 8,000, ,000, ,000, ,000,000 To be used for Reclamation fill Reclamation Area (~ -8m) m 3 2,200, ,400, ,700, ,100,000 Offshore dumping (3) Soil Improvement & Reclamation 1,094,410, % of DC Revetment North Revetment m 2,400 47, ,000,000 2,500 6,000, ,000,000 Depth: -5m East Revetment m ,500 19,000,000 2,500 1,000,000 20,000,000 Depth: -4.5m East Revetment m 1,600 37,500 60,000, , ,000, ,000,000 Depth: -4m, CDM Soil improvement Reclamation & Soil Improvement Reclamation (DL+3.5 m) m 3 8,000, Use of Dredged soil Reclamation (Preload) m 3 1,700, ,000, ,500, ,500,000 Borrow sand from Lampung/Belitung Soil Improvement m 2 565, ,750, ,160, ,910,000 PVD@1.0m (4) Access Bridge & Road 126,165, % of DC Earth Works m 2 16, ,041, ,449,000 14,490,000 Bridge Works m 2 4,025 17,280 69,552,000 9,720 39,123, ,675,000 L=320m, PC-I Girder, 8 Piers + 2 Abatts Road Accessories l.s. 1 2,550,000 2,550, , ,000 3,000,000 (5) Quay Wall 825,000, % of DC Piled Pier m 1, , ,500, , ,500, ,000,000 Piles+Deck+Accessories, Slope protection, SP wall (6) Container Handling Equipment 1,650,850, % of DC Container Crane Quay Gantry Crane unit 10 9,350,000 93,500,000 84,150, ,500, ,000,000 Post Panamx type Rubber-tyred Gantry Crane unit 36 1,540,000 55,440,000 13,860, ,960, ,400,000 1-over-4 Reach Stacker unit 5 660,000 3,300,000 5,940,000 29,700,000 33,000,000 Laden Container Handling Forklift (10-ton) unit 5 165, ,000 1,485,000 7,425,000 8,250,000 Empty Container Handling Tractor and Yard Chassis set ,000 6,600, ,000 59,400,000 66,000,000 Other System Terminal Management System l.s. 1 3,600,000 3,600,000 32,400,000 32,400,000 36,000,000 PCs and Office Fittings l.s. 1 2,880,000 2,880,000 4,320,000 4,320,000 7,200,000 X -ray Inspection l.s. 1 1,100,000 1,100,000 9,900,000 9,900,000 11,000, m x 30 m, 1 unit (7) Yard Pavement, Terninal Facilities, Utilities, etc. 931,037, % of DC Yard Pavement Stacking Yard Pavement m 2 285, ,580, ,720, ,300,000 Asphalt + Concrete Sleepers Passage Pavement m 2 350, ,500, ,900, ,400,000 Asphalt + ILB Outer Road m 2 19, ,908, ,932,800 14,841,600 Asphalt, 3-lane (width 12 m) Storm Drainage l.s. 1 34,846,000 34,846,000 14,934,000 14,934,000 49,780,000 Others l.s. 1 2,800,000 2,800,000 1,200,000 1,200,000 4,000,000 Terminal Buildings Office Buildings m 2 3,500 6,120 21,420,000 1,530 5,355,000 26,775,000 20m x 35m x 5storeys, RC building Maintenance Shop m 2 2,000 5,400 10,800,000 1,350 2,700,000 13,500,000 40m x 30m, Steel fabrication Maintenance Area m 2 2,000 1,310 2,620, ,740,000 4,360,000 40m x 30m, Concrete foundation Terminal Gate m 2 1,200 5,770 6,924,000 13,470 16,164,000 23,088,000 24m x 50m, Weigh bridge Fuel Station m ,410 1,364,000 2, ,000 2,276,000 Security Building l.s. 1 2,800,000 2,800, , ,000 3,500,000 Substation l.s , ,500 2,222,500 2,222,500 3,175,000 Miscellaneous l.s. 1 3,492,000 3,492, , ,000 4,365,000 Garage, Canteen, Workers' huts, etc. Utility Facilities l.s ,141, ,141,600 31,535,400 31,535,400 Water supply, Lighting, Power supply, Fire fighting, Sewerage, Reefer 157,677,000 facility, Security system, ICT Sub-total of Direct Construction Cost (DC) 2,990,232,100 3,656,043,500 6,646,275,600 Phase I Development 3. Project Related Expenses (1) Engineering Cost l.s. 1 89,706, ,681, ,388,268 3% of DC (2) Contingency l.s ,023, ,604, ,627,560 10% of DC (3) Administration Cost l.s. 1 29,902,321 36,560,435 66,462,756 1% of DC Sub-total of Project Related Expenses 418,632, ,846, ,478, % of DC 4. Total Construction Cost 3,508,107,077 4,329,670,798 7,837,777,874 Total of ( ) VAT 350,810, ,967, ,777,787 10% of 4 Grand Total of Phase I Development 3,858,917,784 4,762,637,877 8,621,555,661 Total + VAT 44.8% 55.2% 1 USD = 9,000 Rupiah 1 Yen = 110 Rupiah Phase I 71,252,526 *1,000 Yen (Excluding VAT) 5-2

99 Table Preliminary Project Cost Estimate: Alternative B Description Unit Quantity Preliminary Cost Estimate for Container Terminal Expansion at Tanjung Priok (Phase I) Cost Estimate (1,000 Rupiah) Local Portion Foreign Portion Unit Price Amount Unit Price Amount 1. General Cost Mobilization / Demobilization l.s. 1 74,761,803 92,724, ,486, % of DC Mobi / Demobilization of CDM Vessles l.s. 1 4,486,680 40,380,120 44,866,800 CDM vessels from Japan Temporary Work Yard l.s. 1 16,000,000 24,000,000 40,000,000 Other Preparatory Works l.s. 1 4,000,000 6,000,000 10,000,000 Sub-total of General Cost 99,248, ,104, ,353, % of DC 2. Direct Construction Cost (1) Breakwaters 402,863, % of DC Construction Dam Tengah Extension m 1,500 60,000 90,000,000 90, ,000, ,000,000 Demolition Dam Citra m 1,900 16,360 31,084,000 24,540 46,626,000 77,710,000 Dam Pertamina m 2,170 16,360 35,501,200 24,540 53,251,800 88,753,000 Jetty m ,000 4,560,000 18,000 6,840,000 11,400,000 Alternative -B : JICA Proposed Layout - Berth 1,000m - Depth -14.5m Combined Total (2) Dredging Channel & Basin 1,496,250, % of DC Deepening (-14.0~ -14.5m) m 3 1,800, To be Dredged by Urgent Project, Offshore dumping Deepening for Phase I (~ -14.5m) Basin (~ -10m) m 3 7,700, ,900, ,450, ,350,000 Offshore dumping Basin (-10m ~ -14.5) m 3 7,300, ,100, ,050, ,150,000 To be used for Reclamation fill Reclamation Area (~ -8m) m 3 2,500, ,500, ,250, ,750,000 Offshore dumping (3) Soil Improvement & Reclamation 1,034,410, % of DC Revetment North Revetment m 1,200 37,500 45,000, , ,000, ,000,000 Depth: -5m, CDM Soil improvement West Revetment m ,500 28,500,000 2,500 1,500,000 30,000,000 Depth: -4m East Revetment m ,500 22,500, , ,500, ,000,000 Depth: -4.5 m, CDM Soil improvement Reclamation & Soil Improvement Reclamation (DL+3.5 m) m 3 7,300, Use of Dredged soil Reclamation (Preload) m 3 1,700, ,000, ,500, ,500,000 Borrow sand from Lampung/Belitung Soil Improvement m 2 565, ,750, ,160, ,910,000 PVD@1.0m (4) Access Bridge & Road 359,040, % of DC Earth Works m 2 16, ,041, ,449,000 14,490,000 Bridge Works m 2 12,650 17, ,592,000 9, ,958, ,550,000 L=1,000m, PC-I Girder, 27 Piers + 2 Abatts Road Accessories l.s. 1 2,550,000 2,550, , ,000 3,000,000 (5) Quay Wall 825,000, % of DC Piled Pier m 1, , ,500, , ,500, ,000,000 Piles+Deck+Accessories, Slope protection, SP wall Remarks (6) Container Handling Equipment 1,650,850, % of DC Container Crane Quay Gantry Crane unit 10 9,350,000 93,500,000 84,150, ,500, ,000,000 Post Panamx type Rubber-tyred Gantry Crane unit 36 1,540,000 55,440,000 13,860, ,960, ,400,000 1-over-4 Reach Stacker unit 5 660,000 3,300,000 5,940,000 29,700,000 33,000,000 Laden Container Handling Forklift (10-ton) unit 5 165, ,000 1,485,000 7,425,000 8,250,000 Empty Container Handling Tractor and Yard Chassis set ,000 6,600, ,000 59,400,000 66,000,000 Other System Terminal Management System l.s. 1 3,600,000 3,600,000 32,400,000 32,400,000 36,000,000 PCs and Office Fittings l.s. 1 2,880,000 2,880,000 4,320,000 4,320,000 7,200,000 X -ray Inspection l.s. 1 1,100,000 1,100,000 9,900,000 9,900,000 11,000, m x 30 m, 1 unit (7) Yard Pavement, Terninal Facilities, Utilities, etc. 931,037, % of DC Yard Pavement Stacking Yard Pavement m 2 285, ,580, ,720, ,300,000 Asphalt + Concrete Sleepers Passage Pavement m 2 350, ,500, ,900, ,400,000 Asphalt + ILB Outer Road m 2 19, ,908, ,932,800 14,841,600 Asphalt, 3-lane (width 12 m) Storm Drainage l.s. 1 34,846,000 34,846,000 14,934,000 14,934,000 49,780,000 Others l.s. 1 2,800,000 2,800,000 1,200,000 1,200,000 4,000,000 Terminal Buildings Office Buildings m 2 3,500 6,120 21,420,000 1,530 5,355,000 26,775,000 20m x 35m x 5storeys, RC building Maintenance Shop m 2 2,000 5,400 10,800,000 1,350 2,700,000 13,500,000 40m x 30m, Steel fabrication Maintenance Area m 2 2,000 1,310 2,620, ,740,000 4,360,000 40m x 30m, Concrete foundation Terminal Gate m 2 1,200 5,770 6,924,000 13,470 16,164,000 23,088,000 24m x 50m, Weigh bridge Fuel Station m ,410 1,364,000 2, ,000 2,276,000 Security Building l.s. 1 2,800,000 2,800, , ,000 3,500,000 Substation l.s , ,500 2,222,500 2,222,500 3,175,000 Miscellaneous l.s. 1 3,492,000 3,492, , ,000 4,365,000 Garage, Canteen, Workers' huts, etc. Utility Facilities l.s ,141, ,141,600 31,535,400 31,535,400 Water supply, Lighting, Power supply, Fire fighting, Sewerage, Reefer 157,677,000 facility, Security system, ICT Sub-total of Direct Construction Cost (DC) 2,990,472,100 3,708,978,500 6,699,450,600 Phase I Development 3. Project Related Expenses (1) Engineering Cost l.s. 1 89,714, ,269, ,983,518 3% of DC (2) Contingency l.s ,047, ,897, ,945,060 10% of DC (3) Administration Cost l.s. 1 29,904,721 37,089,785 66,994,506 1% of DC Sub-total of Project Related Expenses 418,666, ,256, ,923, % of DC 4. Total Construction Cost 3,508,386,677 4,391,340,073 7,899,726,749 Total of ( ) VAT 350,838, ,134, ,972,675 10% of 4 Grand Total of Phase I Development 3,859,225,344 4,830,474,080 8,689,699,424 Total + VAT 44.4% 55.6% 1 USD = 9,000 Rupiah 1 Yen = 110 Rupiah Phase I 71,815,698 *1,000 Yen (Excluding VAT) 5-3

100 5.1.2 Preliminary Construction Program Practical construction program is shown in the following figures. Both Alternative A and B require approx. 36 months to complete. Fig Preliminary Construction Program: Alternative - A Construction Program for Container Terminal Expansion at Tanjung Priok (Phase I) Alternative - A : Pelindo Layout - Berth 1,000m - Depth -14.5m Year/Month 1st Year 2nd Year 3rd Year Construction Item Q'ty Preparation (1) Breakwater Demolition 4,450m Construction w/ Bamboo Piles 1,500m (2) Dredge Channel & Basin Offishore Dumping 12.7Mil m3 For Reclamation 8.0Mil m3 (3) Soil Improvement & Reclamation Revetment Revetment w/ CDM 1,600m Revetment w/ Bamboo Piles 2,800m Reclamation Dredged Material 8.0Mil m3 Soil Improvement 565,000m2 Borrow Material 1.7Mil m3 Preloading (4) Access Bridge & Road Earth Works 16,100m2 Bridge Works 4,025m2 Road Accessories (5) Quay Wall RC SSP 1,000m Piling 1,400piles Rock Works 1,000m Concrete Deck 40blocks (6) Container Handling Equipment (7) Yard Pavement, Terminal Facilities, Utilities, etc. Yard Pavement 575,000m2 Terminal Buildings Utilities Fig Preliminary Construction Program: Alternative B Construction Program for Container Terminal Expansion at Tanjung Priok (Phase I) Alternative - B : JICA Layout - Berth 1,000m - Depth -14.5m Year/Month 1st Year 2nd Year 3rd Year Construction Item Q'ty Preparation (1) Breakwater Demolition 4,450m Construction w/ Bamboo Piles 1,500m (2) Dredge Channel & Basin Offishore Dumping 12.0Mil m3 For Reclamation 7.3Mil m3 (3) Soil Improvement & Reclamation Revetment Revetment w/ CDM 1,800m Revetment w/ Bamboo Piles 600m Reclamation Dredged Material 7.3Mil m3 Soil Improvement 565,000m2 Borrow Material 1.7Mil m3 Preloading (4) Access Bridge & Road Earth Works 16,100m2 Bridge Works 12,650m2 Road Accessories (5) Quay Wall RC SSP 1,000m Piling 1,400piles Rock Works 1,000m Concrete Deck 40blocks (6) Container Handling Equipment (7) Yard Pavement, Terminal Facilities, Utilities, etc. Yard Pavement 575,000m2 Terminal Buildings Utilities 5-4

101 5.2 Cost Estimate: Access Road Project costs are preliminarily estimated and summarized in the following tables. Table Summary of Preliminary Project Cost Estimate unit Quantity Amount Local Portiom Foreign Portiom (Million Rupiah) (Million Rupiah) (Million Rupiah) 1 Direct construction cost ,957 51,327 21,630 embankment m2 16,100 14,490 13,041 1,449 bridge m2 4,025 54,338 34,776 19,562 PC-I Gairder Road facility - 1 4,130 3, Indirect cost,etc - 21,887 15,398 6,489 3 Total 94,844 66,725 28,119 <Account of quantity> Embankment section 14.0m(Total width) 1,150m(Embankment length)= 16,100m2 Bridge section 11.5m(Total width) 350m(Embankment length)= 4,025m2 Above unit price are adjusted with study team of JICA Master plan. Just for reference, the cost estimation of the Master Plan based on this condition is calculated as below. Note 30% of Direct construction cost (VAT(10%),etc) unit Quantity Amount Local Portiom Foreign Portiom (Million Rupiah) (Million Rupiah) (Million Rupiah) 1 Direct construction cost , ,617 57,764 embankment m2 16,100 14,490 13,041 1,449 bridge m2 12, , ,127 54,648 PC-I Gairder Road facility ,116 9,449 1,667 2 Indirect cost,etc - 58,914 41,585 17,329 3 Total 255, ,201 75,094 Note 30% of Direct construction cost (VAT(10%),etc) Fig reference map by JICA master plan 5-5

102 5.3 Public / Private Investment Patterns As mentioned on Chapter 3.2 and 3.3, the demand forecast at the port of Tanjung Priok is expected to exceed the current port handling capacity near future. Under this progress, the construction plan phase 1 of new terminal at north Kalibaru is required to be executed urgently. As of December, 2010, there are 2 plans consisting of Jica proposed plan which is under study of DGST and Pelindo II s plan which is private project at their expense. Both plans have different demarcation on public and private investments. Pelindo II stated in case of utilization of Japanese ODA that the planned construction schedule is not acceptable in view of the time spent for agreement and formalities between 2 countries involved under the quick growth in demand over the capacity expected in So, they have declared earlier construction and operation of new terminal. In this chapter, the study team has proceeded comparison of the construction schedule based on public and private investments patterns. The comparison table for possible 6 demarcation cases is prepared for the construction facilities in Table Table Table for demarcation patterns Construction Facilities case 1 case 2 case 3 case 4 case 5 case 6 1 Breakwater Public Public Public Private Public Public 2 Dredging Channel / Turning circle Public Public Public Private Public Public 3 Soil improvement & Reclamation Public Public Public Private Private Private 4 Bridge & Road Public Public Public Private Private Public 5 Quaywall Private Public Public Private Private Public 6 Quay Crane Private Private Public Private Private Private 7 TML facilities / Pavement / Equipments Private Private Private Private Private Private Case 1 3 are that the public is undertaking construction of the public facilities incl. breakwater, dredging, and reclamation which require high initial investment and are not contributing to the private benefit under operation and management. The cases of provision for costly quaywall and quay cranes are included. Case 4 shows that all construction works are undertaken by the private, that is same as PelindoII s plan. In Case 5, the public is undertaking dredging and construction of breakwater in order to reduce economic burden of the private. Case 6 is the idea that the private is undertaking the infrastructure which requires earlier construction under quick decision scheme. 5.4 Analysis of Time-Frame of the Project Case 1, 4 and 5 are picked up for comparison of the project schedule as per below table. Case 1 shows the demarcation pattern based on current DGST process ( in F/S ) and Case 4 on the process of Pellindo II s plan ( on the tender of reclamation work) It is suggested that Case 4 ( Pelindo II s plan) can offer commencement of operation around 3 rd quarter of 2014 by 21 month earlier than Case 1 ( DGST plan ) which still needs lead time until the mid of After the study of soil condition around the dredging area, it is suggested that the soft layers of mad on the surface of seabed is not appropriate for reclamation due to difficulty on soil improvement and therefore, should be disposed. The deeper dredged materials can be reused for reclamation. Therefore, Case 5 enables the private to start reclamation in parallel to the dredging by the public. Despite the above process considered, Case 5 have late commencement of the private work and still require the opening same as Case 1. As result of study, it is suggested that the commencement of operation is expected in 2016 ( partial in 2015 ) for Public/Private investment, and in 2014 ( partial in 2013 ) for all private investment. 5-6

103 Table Project schedule Case 1 Work Item Year Remarks Quoter Government (MOT) Feasibility Study (5) Work Demarcation Dredging Public E/N, L/A (3) Partial Operation Breakwater Public Tender Consultant (6) Full Operation Soil Improvement & Reclamation Public Survey & Detailed Design (10) Bridge & Road Public Tender Contractor (6) Quaywall Private Construction (36) Terminal Facilities Private (Dredging) (20) Equipment Private (Breakwater) (20) (Soil Improvement & Reclamation) (36) (Bridge & Road) (20) Private Sector Planning & Basic Design (10) Tender Contractor (6) Construction (Design & Buld) (26) (Quaywall) (24) (Terminal Facilities) (24) (Equipment) (24) 注 )( ) 内数字は月数を示す Case 4 Work Item Government (MOT) Private Sector Planning & Basic Design Year Remarks Quoter Work Demarcation Tender Contractor (6) Construction (Design & Buld) (42) (Dredging) (20) (Breakwater) (20) (Soil Improvement & Reclamation) (36) (Bridge & Road) (20) (Quaywall) (24) (Terminal Facilities) (24) (Equipment) (24) Partial Operation Full Operation Dredging Breakwater Soil Improvement & Reclamation Bridge & Road Quaywall Terminal Facilities Equipment Private Private Private Private Private Private Private note: ( ) indicates work months required Case 5 Work Item Year Remarks Quoter Government (MOT) Feasibility Study (5) Work Demarcation Dredging Public E/N, L/A (3) Partial Operation Breakwater Public Tender Consultant (6) Soil Improvement & Reclamation Private Survey & Detailed Design (10) Full Operation Bridge & Road Private Tender Contractor (6) Quaywall Private Construction (20) Terminal Facilities Private (Dredging) (20) Equipment Private (Breakwater) (20) Re-Use of Dredged Material to Reclamation Private Sector Planning & Basic Design (10) Tender Contractor (6) Construction (Design & Buld) (42) (Soil Improvement & Reclamation) (Bridge & Road) (Quaywall) (Terminal Facilities) (Equipment) (20) (36) (24) (24) (24) note: ( ) indicates work months required 5-7

104 5.5 Financial Analysis Purpose and methodology The purpose of this section is to evaluate the feasibility of this project by calculating FIRR (Financial Internal Rate of Return) on the soundness of the balance of payments and investment earnings over time. The study is proceeded on the fore-mentioned plans in chapter 3, Alternative A ( all Private investment ) and Alternative B ( Public Private Partnership ) for comparison Prerequisite Case for the study The feasibility study is proceeded on Alternative A plan (Case 6 on the below table) and Alternative B plan (Case 1) selected from the demarcation patterns for comparison. Table Table for demarcation patterns Project schedule The project plans are selected as Case 6 for Alternative A plan and Case 1 for Alternative B plan from the demarcation patterns for the study. The project schedules for Case 6 for Alternative A plan and Case 1 for Alternative B plan are shown in below tables. Table Project schedule (Case 6, Alternative A plan) 5-8

105 Table Project schedule (Case 1, Alternative B plan) Project cost estimate The annual inflation by 5% is taken into consideration. The project cost is estimated based on the above mentioned working processes and inflation as below. (Exchange rate : 1 US$ = 9,000 IDR) Table Project cost including inflation (Alternative A plan ) Cost (1,000 IDR) Cost (1,000 USD) Description Present Estimate Incl. 5% Inflation Present Estimate Incl. 5% Inflation 1. General Cost 261,023, ,716,600 29,000 29, Direct Construction Cost 6,646,275,600 6,877,345, , ,100 (1) Breakwaters 402,863, ,315,500 44,800 46,100 (2) Dredging Channel & Basin 1,615,950,000 1,669,988, , ,600 (3) Soil Improvement & Reclamation 1,094,410,000 1,148,715, , ,600 (4) Access Bridge & Road 126,165, ,744,400 14,000 14,700 (5) Quay Wall 825,000, ,626,300 91,700 96,600 (6) Container Handling Equipment 1,650,850,000 1,663,773, , ,900 (7) Yard Pavement, Terninal Facilities, Utilities, etc. 931,037, ,182, , , Project Related Expenses 930,478,600 1,017,013, , ,000 Total 7,837,777,900 8,160,076, , ,600 VAT (10%) (783,777,790) (816,007,600) (87,090) (90,660) Total Incl. VAT (8,621,555,690) (8,976,083,600) (957,990) (997,260) 5-9

106 Table Project cost including inflation (Alternative B plan ) Cost (1,000 IDR) Cost (1,000 USD) Description Present Estimate Incl. 5% Inflation Present Estimate Incl. 5% Inflation 1. General Cost 262,353, ,186,900 29,200 31, Direct Construction Cost 6,699,450,600 7,234,167, , ,800 (1) Breakwaters 402,863, ,508,400 44,800 47,500 (2) Dredging Channel & Basin 1,496,250,000 1,595,278, , ,300 (3) Soil Improvement & Reclamation 1,034,410,000 1,127,053, , ,200 (4) Access Bridge & Road 359,040, ,855,800 39,900 43,900 (5) Quay Wall 825,000, ,613,600 91, ,200 (6) Container Handling Equipment 1,650,850,000 1,686,069, , ,300 (7) Yard Pavement, Terninal Facilities, Utilities, etc. 931,037,600 1,056,789, , , Project Related Expenses 937,923,100 1,000,108, , ,100 Total 7,899,726,800 8,514,463, , ,000 VAT (10%) (789,972,680) (851,446,300) (87,780) (94,600) Total Incl. VAT (8,689,699,480) (9,365,909,300) (965,580) (1,040,600) Table Project cost including inflation (Alternative B Public portion) Cost (1,000 IDR) Cost (1,000 USD) Description Present Estimate Incl. 5% Inflation Present Estimate Incl. 5% Inflation 1. General Cost 92,008,700 97,391,000 10,200 10, Direct Construction Cost 3,292,563,000 3,544,695, , ,900 (1) Breakwaters 402,863, ,508,400 44,800 47,500 (2) Dredging Channel & Basin 1,496,250,000 1,595,278, , ,300 (3) Soil Improvement & Reclamation 1,034,410,000 1,127,053, , ,200 (4) Access Bridge & Road 359,040, ,855,800 39,900 43,900 (5) Quay Wall (6) Container Handling Equipment (7) Yard Pavement, Terninal Facilities, Utilities, etc Project Related Expenses 460,958, ,521,000 51,200 54,600 Total 3,845,530,500 4,133,607, , ,300 VAT (10%) (384,553,050) (413,360,740) (42,730) (45,930) Total Incl. VAT (4,230,083,550) (4,546,968,140) (470,030) (505,230) Table Project cost including inflation (Alternative B plan Private portion) Cost (1,000 IDR) Cost (1,000 USD) Description Present Estimate Incl. 5% Inflation Present Estimate Incl. 5% Inflation 1. General Cost 170,344, ,795,900 18,900 20, Direct Construction Cost 3,406,887,600 3,689,472, , ,900 (1) Breakwaters (2) Dredging Channel & Basin (3) Soil Improvement & Reclamation (4) Access Bridge & Road (5) Quay Wall 825,000, ,613,600 91, ,200 (6) Container Handling Equipment 1,650,850,000 1,686,069, , ,300 (7) Yard Pavement, Terninal Facilities, Utilities, etc. 931,037,600 1,056,789, , , Project Related Expenses 476,964, ,587,600 53,000 56,500 Total 4,054,196,300 4,380,855, , ,700 VAT (10%) (405,419,630) (438,085,560) (45,040) (48,670) Total Incl. VAT (4,459,615,930) (4,818,941,160) (495,440) (535,370) 5-10

107 Revenue and expense items for analysis The major terms including revenue and expense items applied in the financial analysis are summarized in below. The procurement of investments by the terminal operator is assumed to comprise 30% by the owned capital and 70% by a loan from the commercial bank based on the discount rate of 10.5%. Alternative A, Case 6 項目 Table Financial terms and condition for analysis 政府 民間 1 事業費分担 - 2 収入 - 航路浚渫 防波堤建設 地盤改良 埋立 橋梁 道路建設 岸壁建設 陸上ターミナル施設建設 荷役機械調達 荷役手数料 トランシップ料 コンテナ保管料 コンテナ転地料等 3 運営費 - 人件費 燃料費 水道光熱費 ターミナルマネージメント費 4 維持管理費 - 5 減価償却費 - 6 税金 - 利益の 20% 岸壁 ヤード舗装 建物 荷役機械 維持浚渫 アクセス道路防波堤 護岸 埋立地 アクセス道路 岸壁 ヤード舗装 建物 荷役機械 7 物価上昇 年率 5% の物価上昇率を 2020 年まで考慮 ( 建設費 運営費 ) 8 レベニューシェア 9 資金調達 - Alternative B, Case 1 項目 政府 自己資金 30% 市中銀行 70% 市中銀行 ( 年利 15% 返済期間 10 年 据置期間なし ) 民間 1 事業費分担航路浚渫 防波堤建設 地盤改良 埋立 橋梁 道路建設岸壁建設 陸上ターミナル施設建設 荷役機械調達 2 収入岸壁使用料 曳船料等 荷役手数料 トランシップ料 コンテナ保管料 コンテナ転地料等 3 運営費人件費 水道光熱費等人件費 燃料費 水道光熱費 ターミナルマネージメント費 4 維持管理費維持浚渫 アクセス道路岸壁 ヤード舗装 建物 荷役機械 5 減価償却費 - 岸壁 ヤード舗装 建物 荷役機械 6 税金 - 利益の 20% - 7 物価上昇 8 レベニューシェア 9 資金調達 民間ターミナルオペレーターの収入の 10% を Royalty として政府に支払うと仮定 円借款 ( 年利 1.5% 返済期間 25 年 据置期間 7 年 ) 円借款 STEP( 年利 0.2% 返済期間 40 年 据置期間 10 年 ) 年率 5% の物価上昇率を 2020 年まで考慮 ( 建設費 運営費 ) 自己資金 30% 市中銀行 70% 市中銀行 ( 年利 15% 返済期間 10 年 据置期間なし ) Evaluation The outcome of evaluation is summarized in the below table. FIRR(Financial Internal Rate of Return) of Alternative A was calculated at lower value, 8.6%, which is below the discount rate of 10.5% in the assumed owned capital (30% of total investment amount). In the other hand, Alternative B was quoted at 3.8% for FIRR in the public portion and 18.1% for the private portion. The major revenue of the public comprises the royalty (10% of the revenue of private terminal operator) on the previous assumptions but the lower interest loans including Japanese yen loan shall be required to compensate repayment of the loan. The discussion is continued at the chapter of Cash flow in details. FIRR for the private portion 18.1% which is higher than the discount rate of 10.5%. It is recognized that Alternative B is very feasible in financial viewpoint. As the result of evaluation, the Alternative B plan would be proposed for the favorable demarcation in finance. 5-11

108 Investment Cost (1,000 USD) Table Summary of financial analysis Alternative A Case 6 Private Operator Government Alternative B Case 1 Private Operator 906, , ,700 Total 946,000 FIRR (%) 8.6% 3.8% 18.1% (Sensitivity Analysis) (A) 10% overrun for investment cost FIRR (%) 7.7% 3.2% 16.5% (B) 10% lower demand FIRR (%) 7.2% 3.1% 16.3% (A) & (B) FIRR (%) 6.4% 2.5% 14.7% 5.6 Preliminary Economic Analysis Purpose and Methodology of Economic Analysis The purpose of this section of the report is to evaluate the effect of public investment from the viewpoint of the national economy. The national benefit is calculated based on the comparison between the With Project Case and the Without Project Case. All benefits and costs in market price are converted to the economic price in order to eliminate distortion due to political economic factors such as import duty or government subsidy, etc. The feasibility of the project is evaluated with the calculated Economic Internal Rate of Return (EIRR) Prerequisites for Economic Feasibility Base Year The Base Year here means the standard year in the estimation of costs and benefits. In this study, 2010 is set as the Base Year Targeted projects All the facilities and construction works required to commence the container terminal are included for the calculation Project Life The period of calculation (project life) in the economic analysis is assumed to be 35 years, taking into consideration the depreciation period of the main facilities Exchange Rate of Foreign Currency Exchange rate of foreign currency is assumed as, US$ 1.00=Rupiah 9,000=JPY Identification of With Case and Without Case As a cost-benefit analysis is conducted on the difference between the With case and the Without case, it is important to define the With case and the Without case. This report proposes to set the With case and Without case as follows; With case With case is defined as the completion of the project proposed in this study. Without case As for the Without case, an alternative plan should be defined in order to handle the cargos which are more than the capacity of the existing container terminals. In the case of Without case, it is assumed that the cargos are handled at the TJ Emas port, which is located in the Java Island, and transferred to the hinterland of TJ Priok port by truck. Other conditions are set as same as With case. (cargo demand, locations of shipper/consignee, etc) 5-12

109 Jakarta~Semarang Road distance;about 470km TJ Priok TJ Emas Figure Setting of a Alternative port Conversion to Economic Price For the economic analysis, all prices must be expressed in economic prices, i.e., international prices or border prices. In general, the value of goods quoted at market price does not always represent the economic value of goods. They often include transfer items such as tax, customs duties and subsidies, which do not actually reflect any consumption of resources. Therefore, the market prices shall be converted into economic prices by eliminating these transfer items Standard Conversion Factor;SCF Import duties and export subsidies create a price difference between the domestic market and the international market. The Standard Conversion Factor (SCF) is applied to determine the economic prices of certain non-traded goods that cannot be valued at border prices. The SCF makes up for this price difference. The SCF is obtained by the following formula: SCF=(I+E)/ (I+Di)+(E+De) where, I : Total value of imports (CIF) E : Total value of exports (FOB) Di : Total value of import duties De : Total value of export duties Transition of SCF in Indonesia is shown in the table below. Due to the trade liberalization policy of the government, application of lowered tariff rate with ASEAN countries, implementation of FTA, etc., SCF will become closer and closer to As Indonesia holds a quite open market policy, it is assumed in this Study that market mechanism properly functioning; hence SCF is set at 1.0. ( Customs and other import duties and Taxes on exports in the below table are not available after 2005) Table SCF (unit;rp. Billion) Year Imports of goods and services 50, , , , , , , ,588 1,003,270 1,418,110 1,482,260 Exports of goods and services 53, , , , , , ,122 1,036,320 1,162,970 1,474, ,616 Customs and other import duties 2,486 3,029 9,026 10,344 10,885 12, Taxes on exports SCF Source;World bank, World Development Indicators Conversion Factor for Consumption;CFC This conversion factor is used to convert the market prices of consumer goods into the border prices. The Conversion Factor for Consumption (CFC) is usually calculated in the same manner as the Standard 5-13

110 Conversion Factor, replacing total imports and exports by total imports and exports of consumer goods. The CFC is obtained by the following formula. CFC=(Ic+Ec)/ (Ic+Dic)+(Ec+Dec) where, Ic : Total value of consumer goods imports (CIF) Ec : Total value of consumer goods exports (FOB) Dic : Total value of consumer goods import duties Dec : Total value of consumer goods export duties In calculating for the CFC, information on the tariff income for consumer goods is required, but it is not available. However, in Indonesia, the trade value for consumer goods in relation to the total trade amount is in the vicinity of 6% ~ 8% lately, and it is adjudged that the consumer lifestyle is controlled by non-tradable goods, thus the CFC is set at Table Import Share of Consumer Goods (%) Year Import of Cunsumer Goods(%) 8.1% 8.0% 7.8% 8.8% 6.4% Note; Figure 2008 includes bonded zones Source;Statistical Yearbook of Indonesia Conversion Factor for Skilled Labor;CFSL Cost of skilled labor is calculated based on actual market wages, assuming that the market mechanism is functioning properly. However, as the data are domestic prices or market prices, they should be converted to border prices by multiplying by the CFC. The Conversion Factor for Skilled Labor (CFSL) is expressed by the following formula: CFSL=Opportunity cost of skilled labor CFC / Actual market wages of skilled labor where, Opportunity cost of skilled labor / Actual market wages of skilled labor=1 CFC=1.0 thus the CFCL is set at Conversion Factor for Unskilled Labor;CFUL As wage rate is controlled by a minimum wage system and other governmental regulations despite the existence of a large amount of unskilled labors, the wages paid to unskilled labors by a project are generally above the opportunity cost. Hence, these wages should not be regarded as the economic value of the unskilled labors. The Conversion Factor for Unskilled Labor (CFUL) is obtained by the following formula: CFSL=Opportunity cost of unskilled labor CFC / Nominal wage rate of unskilled labor =Provincial Minimum Wage CFC / Assumed wage rate of unskilled labor Where, CFC=1.0 In this Study, 0.81 is adopted as the Conversion Factor for Unskilled Labor (CFUL) as shown in the table below. 5-14

111 Table Minimum Wage in DKI and Conversion Factor for Unskilled Labor (CFUL) Year Minimum Wage (IDR/Month) 972,604 1,069,865 1,118,009 Assumed Wage Rate for Unskilled Labor (IDR/Month) 1,380,000 CFUL Conversion of Construction Cost Construction costs are divided into the categories of foreign currency portion and local currency portion. Those are consisting of skilled labor, unskilled labor and tradable/non-tradable material. Evaluating on conversion factors, they are summarized in the table bellow; Table Conversion Factors Kind of Cost Conversion Factor Non-Tradable Goods SCF=1.0 Tradable Goods CIF Skilled Labor CFSL=1.0 Unskilled Labor CFUL=0.81 Economic price is calculated based on the following conditisons; CFUL shall be applied but portion of cost can be assumed to be around 1.0%. Extract the following cost - Cost of Land Acquisition;CLA - Transferable Operating Profit (half);top=3% - Value Added Tax;VAT=10% Economic price is computed by the following formula; (1+TOP) CCE=(CCM-CLA-VAT) ( CFUL) CCE=0.97 (CCM-CLA-VAT) Where, CCE; Construction Cost by economic pricing CCM; Construction Cost by market pricing Benefits of the Projects Benefit Items Following items are identified as economic returns brought about by the implementation of the project. 1. Savings of the land transportation cost between the terminal and shipper/consignee 2. Savings of the sea transportation cost due to the construction of deep sea wharves 3. Savings of the time for land and sea transportation 4. Construction cost to enhance the capacity of a alternative port 5. Promotion of regional economic development 6. Increase in employment opportunities and income Item 1 and 2 are considered countable and the monetary benefits of those items are counted in this economic analysis Calculation of Benefit (1) Savings of the land transportation cost between the terminal and shipper/consignee The hinterland of TJ Priok spreads DKI and North-East part of West Java. Taking the wide hinterland of TJ Priok port into account, the average distances between shipper/consignee and ports are set as follows; 5-15

112 With case ;TJ Priok~shipper/consignee 50km Without case ;TJ Emas~shipper/consignee 400km Land transportation cost is calculated by the following formula. Total land transportation cost(cl)=land transportation cost per km road distance where, land transportation cost per km;3,514 Rupiah/truck/km(based on the table bellow) source;asian Foundation ;The Cost of Moving Goods Road Transportation, Regulations and Charges in Indonesia, April 2008 The number of trucks transporting containers is calculated based on the demand forecast. Number of trucks (per year)=container handling volume(teu/year) TEU/BOX conversion rate Where, TEU/BOX Conversion rate ;1.5 Container handling volume ;same as the demand forecast Table Container handling volume Year Container handling volume(teu) , , , ,200, ,700, ~ 1,900,000 (2) Savings of the sea transportation cost due to the construction of deep sea wharves In the With case, deep sea wharves with -14.5m will be implemented and big container vessels can be accommodated. In the Without case, TJ Emas port does not have deep sea wharves so that only small size vessels can be accommodated. As for With case and Without case, typical size of container vessels is set as follows; With case ;4000TEU capacity container vessel Without case ;1000TEU capacity container vessel Sea transportation cost is calculated by the following formula. 5-16

113 Table Formulas to calculate Sea transportation cost by container ship size Container size Vessel type Sea transportation cost (JPY/BOX) 20ft 1000TEU 5,370+7,930 d 4000TEU 2,880+5,020 d 40ft 1000TEU 8,060+11,890 d 4000TEU 4,320+7,530 d Source ;Guideline for the evaluation of port investment 2004, Japan Regarding the sea transportation time, it is assumed that average sea transportation time is 3 days considering that major origin/destination of the cargo is in the Asian region Cost of the project Construction cost Construction cost is the cost that the CDM construction method is applied. Items Table Construction cost Cost (1,000 Rupiah) Alternative A Alternative B 1.Port Costruciton 1. General Cost 261,023, ,353, Direct Construction Cost 6,646,275,600 6,699,450, Project Related Expenses 930,478, ,923,084 Sub total 7,837,777,874 7,899,726,749 2.Road Construction Access Road 86,221,818 86,221,818 TOTAL VAT excluded. Market pricing 7,923,999,692 7,985,948,567 The yearly distribution of construction cost is as follows; Year ratio Maintenance and Operation Costs It is assumed that the maintenance and operation cost is 1 % of the total construction cost Calculation of the EIRR Calculation Method of the EIRR The economic internal rate of return (EIRR) based on a cost-benefit analysis is used to appraise the economic feasibility of the project. The EIRR is the discount rate which makes the costs and benefits of a project during the project life equal. It is calculated by using the following formula. where, n : Period of economic calculation (Construction period plus 35 years) Bi : Benefits in i-th year Ci : Costs in i-th year R : Discount rate 5-17

114 Sensitivity Analysis In order to see whether the project is still feasible when some conditions change, a sensitivity analysis is made with the following assumption. the costs increase by 10% the benefits decrease by 10% Evaluation EIRR of each case is summarized in the table below. In general, it is said that a project with an EIRR of more than 15% is economically feasible considering the opportunity cost of capital in Indonesia. As for this study, the resulting EIRRs of all cases are larger than 15%. This means that the planned project is economically feasible. Table EIRR calculation results CASE Alternative A Alternative B BASE CASE 20.7% 20.6% the costs increase by 10% 19.5% 19.4% the benefits decrease by 10% 19.4% 19.3% 5-18

115 Table EIRR Calculation(Alternative A,BASE CASE) (Unit; Rp. Billion in Economic Pricing) Project Cost Project Benefit land Sea Net Project Year Sub Sub Construction Maintainance transportation transportation Benefit Total Total cost saving cost saving (769) , , (2,306) , , (2,306) , , (2,306) ,267 1, ,188 2,171 2, ,394 1,682 3,076 2, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, % 5-19

116 Table EIRR Calculation(Alternative B,BASE CASE) (Unit; Rp. Billion in Economic Pricing) Project Cost Project Benefit land Sea Net Project Year Sub Sub Construction Maintainance transportation transportation Benefit Total Total cost saving cost saving (775) , , (2,324) , , (2,324) , , (2,324) ,267 1, ,188 2,171 2, ,394 1,682 3,076 2, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, ,558 1,880 3,438 3, % 5.7 Risks on Execution of the Project Necessity for expediting the study/formalities on Japanese ODA scheme The study is proceeded in case of adoption of Japanese ODA loan for the public portion. It is understood that Japanese government have proceed review of the ODA application process in compliance with the request of expediting the process by the counterpart countries and in viewpoints of strategic effectiveness on the support. Japanese government declared the policy in June, 2008 in respect of Expediting Japanese ODA loan process that the approval lead time for procurement of the consultants and construction work should be shortened to within 2 years as target. It is recognized that this policy has been reviewed every year with additional amendments for improvement. It is recommendable that this policy should be optimized for implementation of the subject projects. 5-20

117 With regards to this project, it is considered that E/S (Engineering Service) loan may be applicable and needs to accept the engineering service including collection of the site data, detailed design and preparation of the tender documents etc for the design work in advance to the construction work. This loan scheme is subject to completion of the feasibility study with official acceptance of the practicability/justification of the project, and may be applicable in this project case as the practicability/justification was already confirmed by Pre-F/S of JICA study although F/S is not officially finalized. In ordinary Yen loan, it is in principle that the environment assessment report should be disclosed by 120 days prior to conclusion of the concession contract but E/S loan allows to go on the environment assessment in parallel with design work and preparation of the tender documents, and is one of the favorable option for consideration. In order to expedite the construction aiming to early commencement of the terminal operation, it is required that the various method to reduce the implementation time should be considered and discussed in any occasion. 5-21

118 Chapter 6 Planned Project Schedule

119 6.1 Project Schedule The development plan at North Kalibaru (Alternative B Case 1) is proposed by the study team consequently after financial evaluation on Chapter 5. The project schedule is shown below. Fig Drawing for Alternative B plan, Case 1 Table Project schedule 6-1

120 Container Throughput (1,000TEU) 6.2 Key issues on Project Schedule Consistency of the growth of demand and commencement timing of operation at terminal The handling capacity for international container at the port of Tanjung Priok is roughly calculated at 5million TEUs. The throughput of international containers estimated is considered to exceed the current capacity and will require new terminal in operation under the port development plan phase 1 at north Kalibaru in 2015 as latest. The proposed project schedule will extend over 5 years from F/S to commencement of operation as mentioned in former chapter. It is suggested that the shortest schedule is achievable after review but it is essential to ensure schedule management accurately so that the terminal can be completed without delay. Fig International container throughput and capacity of the terminal 20,000 15,000 Total Throughput Forecast International Container Forecast Domestic Container Forecast 10,000 5, Squeezing a time of application/formalities before commencement of construction Our study has been proceeded based that the investment of public portion will utilize Japanese ODA loans. Japanese government is currently reviewing on implementation process of this loan scheme in compliance with the request on quick agreement from the recipient countries and in strategic consideration for the higher usability of Japan aid. Japanese government announced the policy in June, 2008 in respect of Expediting of the process for Japanese ODA loans that the government is aiming to squeeze the period for consultant works and preparation/procurement and complete it within 2 years. After announcement, this policy has been reviewed every year and updated with subsequent amendments for improvement. The substances of the policy are summarized as follows: Announced on June, 2008 by MOFA, METI, MOF, JICA (Process on application to Loan agreement L/A) For the recipient countries who have proceed many applications and lent ODA loans every year, the appraisal process is to be undertaken twice a year instead of once a year in principle together with other actions taken if necessary in order to squeeze the lead time for LA. For the projects which require immediate action/process in strategic viewpoints, the applications to be accepted whenever necessary and processed with priority separately from the other projects. The current procedures on appraisal to be reviewed by country-wise. The rational procedure is to be taken including omission of the mission by the government and JBIC(JICA now working) for study. (Process on commencement of project) To accept necessary procurement arrangements prior to a sign of LA. To accept the loan including the items for contracts and payments which are arranged prior to exchange of notice and signing on LA. To accept omission of the prior qualification screening for procurement or the qualification screening undertaken in parallel to the tender processing. Year 6-2

121 To accept procurement based on the system of Design-Built for which the contractors has full responsibility on design. To reduce the interest rate on payment of consultants fee to the interest-free level (0.01 %) in order to ensure a quality of construction project and to expedite the process. Subsequent Amendment announced on July, 2009 by MOFA, METI, MOF, JICA (Detailed design for technical cooperation scheme under ODA loan) Currently, the recipient countries have contracted with the consultants company under the ODA loan signed, who have undertaken detailed design. For STEP project ( Special Term for Economic Partnership ), the study of detailed design to be financed under ODA loan scheme and undertaken by JICA immediately in order to reduce the idle time until commencement of the construction work. (Advanced Notice to OECD) The rule of ECG ( The Export Credit Group ) of OECD currently requires to hold the process after the notice of the loan s terms and conditions (notice of untied transparency, notice of consensus) to OECD. The procurement arrangements and commitment (Exchange of Notice EN) are suspended for this period. To enable the recipient countries to proceed procurement of the consultants soon after pledge from the government, the notice to OECD to be advanced in consideration to a timing of dispatch of the appraisal mission from JICA. Subsequent Amendment announced on July, 2010 by MOFA, METI, MOF, JICA (Seamless actions for feasibility study(fs) to detailed design(dd) in case of STEP project) For STEP projects etc required by the counterpart, the contract with the consultants in charge of feasibility study is to include the work scope of DD and tender documents as an option so that the time for procurement of the consultants can be reduced as well as efficient process. In consideration to the above governmental supports in process, the project schedule is able to be revised by reduction of an idle time on the process before commencement of construction work as below table. The supports are applicable for STEP projects only and should be incorporated into this project as STEP project. In order to start the construction in early 2013, the advanced arrangement for appraisal, EN and LA during the feasibility study, and the advanced work on tender of the contractors during detailed design and preparation of tender documents should be essential to reduce the work period but they are required to be reviewed in details. Table Essential terms for advanced schedule on LA prior to construction (proposal) 6-3

122 6.3.1 Reducing a time for approval of SEA/EIA The above revised schedule is provided that SEA(Strategic Environmental Assessment) and EIR(Environmental impact Assessment) should be approved by the government prior to the negotiation of LA after the assessment is completed and submitted within In accordance with the interview, DGST is scheduled to complete new master plan by March, 2011 based on JICA s study and to proceed to arrange for submission/approval of SEA and EIA. It is recommended that the government of Indonesia should take necessary arrangements/actions including parallel preparation work for SEA/EIA for approval. 6-4

123 Chapter 7 Implementing Organization

124 7.1. Joint Capital The objective of this study and proposal is that Itochu Corporation as project owner and their collaborator, NYK Line will participate new terminal project phase 1 at North Kalibaru of Tanjung Priok port. Following to the amendment of shipping law enacted in 2008, the Port Authority newly established is going to replace Pelindo II for port regulator as Pelindo II who have previously managed the public ports as port controller and facility manager become port facility management company. However, it is expected that Pelindo II will remain responsible for managing the public ports based on their previous contribution and achievements on port managements in future. Itochu Corporation and NYK line are aiming to establish the joint terminal management company with Pelindo II for this new terminal project but also have options to invest SPC established or joint operation company involving other local enterprises. All of those plans would involve participation on financial capital by both companies. Under above plans, it is anticipated that the strong candidate for terminal management will become Hutchison Port (HPH) who already have undertaken management/operation at JICT and KOJA together with Pelindo II. In case that the terminal management/operation concession right for new terminal is selected through competitive tender, it may expect possible bidding by mega terminal operators likes PSA, DPW etc as well as Pelindo II under tough situation Procurement of equipments and materials In view of development of new container terminal, Japanese candidates for suppliers are summarized in the table. Especially, the competition with Chinese and Korean suppliers is expected for the steel pipe piles and cargo handling equipments, and European, Chinese and Korean contractors for procurement of suction dredger and trailer-suction dredger. On the other hand CDM ( Cement Deep Mixing ) pontoon is one of Japanese proud machineries and very competitive/efficiency. ( It is observed at Aisa that the CDM soil improvement by land-side equipments is standard in common with the land-side equipments fitted in the pontoon for some works at sea occasionally. Japanese CDM pontoon was designed and built exclusively for the work at sea and has advantage on construction speed and quality. ) Table Candidate of Japanese suppliers and equipments Major Equipments Q'ty Amount (Million Yen ) Manufacturer (Construction Materials) Steel pipe pile 23,000 tons 2,500-3,000 Nippon Steel Corp., JFE etc (Cargo Handling Equipments) Quay gantry crane 10 units 10,000 Mitsui(MES), Mitsubishi(MHI) RTG 36 units 4,000-5,000 MES, MHI, TCM Reach stacker 5 units 200 MHI, TCM etc Fork lift 5 units 60 Toyota, Mitsubishi, TCM etc Tractor head / chassis 60 units 600 Hino, Nissan Diesel, Fuso etc (Software) Terminal operating system/gate system 1 unit 300 MES, etc (Construction Machinery etc) CDM pontoon - - Penta-Ocean, TOA Corp., Toyo Construction etc Suction dredger - - Penta-Ocean, TOA Corp., Toyo Construction etc Trailer-suction dredger - - Penta-Ocean, TOA Corp. etc 7-1

125 7.1.3 Construction Work It is proposed that the dredging up channel, breakwater, reclamation, revetment and bridge/road are responsible for the public and quay wall, yard construction, procurement of equipments for the private. The candidates and possible participation are summarized for implementation as below. (Dredging channel) Adoption of the dredgers owned by Japanese construction company is considered. The European/Asian dredging companies including Dutch, Belgium, Chinese and Korean constructors have owned and operated the dredgers. (Reclamation / Quay wall) It is significant to expedite construction of quay wall in order to squeeze the implementation period as the quay wall is built prior to reclamation. Due to soft sea bed below the quay wall, the soil improvement by CDM is proposed for purpose of short lead time and quality ensured. The CDM pontoon for exclusive use at sea is owned by Japanese contractors and have beneficial use by this project. (Cargo handling equipments) The procurements of Japanese manufactured quay cranes and RTGs etc are considered. Japanese manufacturers have faced hard competition on the price with China low-priced products. 7-2

126 Chapter 8 Technical Advantages of Japanese Company

127 8. Technical advantage of Japanese companies 8.1 Container terminal management It is understood that it is significant to consider the quality of service for the users in terminal management and to ensure continuous efforts and improvements on operational productivity and efficiency among the terminal operators in competition in order to obtain the regular users (shipping lines). Japanese global shipping lines have managed and operated their own terminals, through which they have built their knowledge/experiences on operational demand/required productivity/efficiency etc and management skill at the position of not only for the ships operator (terminal user) but also terminal management. Especially, their terminals in Japan have achieved higher productivity among the world under cooperation with the local stevedore labors. Their knowledge and activity in Japan terminal has been valued in terminal management overseas and contributed to the benefit for the foreign shipping lines who are jointly operated and in vessel-shared operation. 8.2 Cargo handling equipments The terminal requires introduction of highly efficient machineries with stable performance and low breakdown ratio in order to ensure smooth and safety operation. The electrical equipment management system for these equipments is especially required to be high quality and stable due to direct factor on emergency stoppage by breakdown and safety issue involved during operation. Low defect ratio can contribute to not only cargo operation management but also maintenance cost under long term operation. Under these requirements, Japanese equipments have the advantage to the others. Considering to environmental effects and energy issue in future, Japanese manufacturers have developed hybrid machineries and electrical RTG etc with technical advantage. 8.3 Construction work It is said that Japanese firms have the advantage of a quality and process management to Chinese, Korean, Indian, Thailand and other contractors. It is considered that Japanese contractors are beneficial for this project which requires short implementation schedule and quick commencement of operation. With regards to construction materials, a quality of steel pipe piles and corrosion-proof technology have been higher than other Asian products. The introduction of Japanese high technology on soil improvement is practical and is definitely contributing to expediting schedule and higher quality. 8.4 Study / Design Japanese consultants have so far worked on various ODA projects in Indonesia and preformed well for preparation of Master Plan, feasibility study, detailed design, selection of contractors, construction management and other wide fields. For this project, it is essential to invite Japanese consultants in view of necessary introduction of Japanese technology on managing construction under tight schedule, soil improvement and others. 8-1

128 Chapter 9 Financial Outlook

129 9.1 Project finance and investors Financing by the public and the private firms It is proposed in finance that the public is responsible for construction of the basic infrastructures including dredging, breakwaters, reclamation and soil improvement under Japanese ODA yen loan, and the private for quay wall, yard construction and cargo handling equipments (Alternative plan B). The initial investment is estimated at US$ 410 million for the public and US$ 379 million for the private. At this moment, the stakeholders for this project and concessions are considered and charted for reference as below. Fig The stakeholders and concessions for finance Contractor Basic Infrastructure Japan Government ODA Construction Contract MOT Indonesia Supervision Terminal Facilities, Equipment Lender Project Finance Port Authority Concession Contract Terminal Operator Construction Contract Investment Pelindo II Partner (Indonesia) ITOCHU NYK Contractor Equipment Builder 9-1

130 9.1.2 Finance by the public The project is based on finance by Japanese ODA yen loan. The finance terms and conditions in publication are shown in below. Table Terms and conditions of ODA yen loan (Applied for the projects with the advanced notice after April 1, 2010, except the project for climate change) Category Middle income countries Consulting Services GNI per capita (2008) US$1,856-3,855 Terms General Term Preferential Terms STEP Standard/ Option Interest Rate (%) Repayment Period (Years) Grace Period Standard Option Option Standard Option Option Option Standard Option Condition for procurement untied untied tied For consulting services, the interest rate will be minimal (0.01%), the repayment and grace periods and conditions for procurement will be the same as those for main components Finance by the private It is suggested that Japanese companies involved will need to proceed discussion and negotiation with Pelindo II on private financing including selection of the investment funds and share. With regards to the 9-2

131 possible investment funds, the commercial bank finance, JBIC investment fund and JICA investment fund under study etc are will be on selection table in addition to the own funds. 9.2 Risk management on financing Finance by the public The project is based on finance by Japanese ODA yen loan. As per study on Chapter 5 Financial Analysis, on the assumption that the port regulator collects 10% of the revenue at the terminal, IRR resulted at 6% in calculation. It should be avoid due to protection from the risk of possible market fluctuation that the terminal management may have financial difficulty at the initial stage after opening, which is caused by burden of the land fee of the public. STEP which offers a moderate loan condition is proposed for introduction in respect of Japanese ODA loan Finance by the private Project finance including possibility of assorted funds needs discussion and negotiation with JBIC and the major commercial banks etc. The various risks on financing are considered but it is suggested that the risks varied by market fluctuation is the major item and is most likely to require the government guarantee. Market fluctuation (change of demand) Risk raised on possible difficulty of repayment due to less container throughput under unexpected economical crisis and sudden dull market. Delay of implementation schedule Risk on delay of construction schedule due to delay of work by the contractors or inconsistency at work progress between the different contractors in case of hiring individually by the public and the private. The commencement of terminal operation is delayed finally. Delay of construction on the other infrastructures concerned Risk on delay of commencement of terminal operation due to delayed construction of the other infrastructures including the access road. The construction of the access roads needs removal of the citizen and needs their consent but it may be long dispute unresolved. Country risk Risk on unstable of political situation due to change of the president etc, which may induce amendments of the relative law/policy and will force the terminal operators to be burdened with variance of the revenue. Others Risks on exchange rate, breach of the governments agreements etc. 9.3 Analysis of cash flow Cash flow of the public On the following assumptions/conditions, the analysis on cash flow resulted that the revenue from the port service activities is not good enough to make repayment of the loan and the adoption of STEP is feasible to ensure repayment under the same revenue condition. The port regulator collects 10% of the revenue at the terminal. The interest rate of Japan ODA load (1.4%) is applied. STEP project loan (an interest rate 0.2%) is adopted Cash flow of the private terminal operator It is assumed that the initial private financing consists of the own fund at 30% and the commercial bank finance at 70%. The commercial bank interest is based on 15% for the loan period of 10 years with no grace period. The analysis resulted practical repayment. 9-3

132 Chapter 10 Action Plan and Issues

133 10.1 Progress and development toward implementation of the project DGST DGST responsible for the port development plan have started review of the Master Plan at the port of Tanjung Priok and pre-f/s for the port development plan phase 1 at North Kalibaru under support of JICA. DGST have approved the development plan at North Kalibaru phase 1 proposed on the interim report prepared by JICA study team in November, 2010, and are going to revise the Master Plan based on the above JICA study plan until March, The final report of JICA study will be available by May 23, Thereafter, they are preparing to place the requests on feasibility study and detailed design with Japanese government in order to progress the subject plan. Fig Port development plan at North Kalibaru proposed by JICA (source : JICA interim report November, 2010) Progress on establishment of the port authority Shipping law in 2008 and following government regulation in 2009 on port affairs have provided establishment of the port authority and their organization was formulated by the government regulation No.61 in The substance of establishment is to ensure the function of port regulator newly instead that Pelindo II (the state-owned seaport operator) previously have worked on regulator and operator. In accordance with this change, Pelindo II will become the port business entity. The property right of the port area will return to the government in May, 2011 and the leasehold is set up for usage. The staffing and detailed regulations/rules are still under discussion as of January, After the port authority is established, they shall be responsible for issuing the concession for the terminal operation business with the private business entities including Pellindo II. The construction of new terminal is still under discussion at the Ministry of Transport in respect of tender procedures and details of concession etc for participation of the private entities. 10-1

134 Progress of private investment plan Pellindo II is proceeding the private development plan toward opening of new terminal in 2013 and have started detailed design and selection of the contractors at their expense. Indonesian government regulation provided that the concession right for operation of terminal is finalized through tender process but Pelindo II argued no need to take tender process unless the public investment is involved. DGST is not taking a positive stance to accept the construction on heir plan. Their development plan shown below was based on the Master Plan completed by the Ministry of Transport in 2007 but it defers from the revised plan which is now under discussion at DGST on the basis of JICA study. This variety is still at dispute and unresolved. Fig Port development plan at North Kalibaru (Private plan) Participation of 2 Japanese private firms Itochu Corporation and NYK Lines have initiated the PPP project under Japanese ODA loan and intend to participate on thee operation/management of the container terminal at the port development plan phase 1 at North Kalibaru. The port plan on this PPP project was modified based on the proposal of JICA study team is shown below. Their management plan is based on joint venture with Pelindo II, who is however making argument on long implementation schedule under utilization of Japanese ODA loan as the opening of new terminal requires urgency due to higher growth in the projected throughput. Based on our finance analysis, it is quite difficult for Japanese firms to participate the project with higher risks as the all private investment had FIRR at lower rate less than 10% in calculation. On the assumption of participation of 2 Japanese firms in terminal operation business, the concession right is essential to lie at Pelindo II but it is not fixed due to competitive tender process required in new regulation. Pelindo II is insisting to proceed their plan at private investment to ensure obtainable concession right at earlier stage. This issue is still unresolved and under argument. 10-2