TRANSPORTING LIGHT TO THE NATION New Priok Port: A New Paradigm for Indonesia 6th Annual Global Strategic Infrastructure Leadership Forum New York February, 2013 R.J. LINO President Director Indonesia Port Corpora7on
Indonesia Strong Indonesian GDP Growth (2003-2010) 8.0% 6.0% 4.0% CAGR (%) 5.4% 3.4% 4 th largest population in the world >250 million 2.0% 2001 2003 2005 2007 2009 2011 World GDP Growth Indonesian GDP Growth Strongth GDP growth External Sector Balance Sheet Vibrant culture, open democratic society 200% 150% 100% 50% 0% Strong fiscal position Total debt at 26% of GDP 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 External Debt: Public External Debt: Private 2
Indonesia Indonesia lies in the heart of the worlds future global trade > 70% of world sea container flows are Asia-related Domestic trade routes are vibrant and fast-growing Inter-island trade has been growing with 37% CAGR in the last 5 years Inter-island trade has increased ~5x from 638m Tons in 2006 to 3,153m Tons in 2011 Indonesia Today and in 2030 Indonesia Today and in 2030 16 th largest economy in the world 45 million members of the consuming class 53% of population in cities producing 74% of GDP 55 million skilled workers $0.5 trillion market opportunity in consumer services, agriculture and fisheries, resources, and education 7 th largest economy in the world 135 million members of the consuming class 71% of population in cities producing 86% of GDP 113 million skilled workers needed $1.8 trillion market opportunity in consumer services, agriculture and fisheries, resources, and education 3
Tanjung Priok: Trading Heart of Indonesia 8 6 4 2 Container traffic at Tanjung Priok (TEUs) 2000 2002 2004 2006 2008 2010 2012 100% 80% 60% 40% 20% 0% Container traffic at Tanjung Priok (%) 2008 2010 2011 Serves Greater Jakarta Indonesia s capital and one of the world s largest cities (Population >20 million) Port of Tanjung Priok is the largest port in Indonesia and ranks as one of the top 20 ports in the world Acts as the International Gateway of Indonesia (over 60% of national trade) 4
New Priok Development 16.0 m approach channel 12.5m TEU of new capacity Product Terminals New Road Access Access Road Logistics Center 5
New Priok Development PHASE 1 DEVELOPMENT : 2012 2017 ESTIMATE PROJECT COST : US $ 2,500 Million LENGTH OF BERTH : 4000 M DEPTH : 16 M LWS First Opera7on Container Terminal (CT 1) will start in 2014 Container Terminal : 3 Terminals AREA : 132 Ha CAPACITY : 4.5 MILLION TEUs/Year Oil & Gas Terminal : 2 Terminals AREA Logistics CAPACITY Center : 48 Ha : 10.0 MILLION M³ /Year Access Road PHASE 2 DEVELOPMENT : 2018 2023 ESTIMATE PROJECT COST : US $ 2,200 Million LENGTH OF BERTH : 4000 M TOTAL CY AREA : 300 Ha DEPTH : 20 M LWS First Opera7on Container Terminal Phase 2 will start in 2021 Container Terminal : 4 Terminals AREA : 300 Ha CAPACITY : 8.0 MILLION TEUs/Year 6
Capex of Phase 1 and Phase 2 Item Capacity Investment (US$ m)* Number Total investment (US $ m)* Container Terminals 1.5m TEU/year 460.00 7 3,220.00 Product Terminals 500,000 cbm 365.00 2 730.00 Toll Road (offshore) as required 220.00 1 220.00 Toll Road (onshore) as required 40.00 1 40.00 Industrial Park Area as required 200.00 1 200.00 Power StaPon as required 150.00 1 150.00 Other Services as required 100.00 1 100.00 Total 4,660.00 Phase 1: 2012 to 2017 Phase 2: 2018 but subject to continuing market demand Container Terminal 1: Fast Track, Operations in 2014 Product Terminal 1: Fast Track, Operations in 2016 7
Consensus Container Demand Forecast 14,000 1,000 TEU 12,000 10,000 8,000 6,000 Forecast Container Handling (Demand) Phase 2 4,000 2,000 2012 2014 2015 2016 2017 2018 2019 2020 2021 ExisPng CT1 CT2 CT3 Forecast Container Handling (Demand) 8
The Product Terminal Gap 90,000 80,000 70,000 1,000 t 60,000 50,000 40,000 30,000 20,000 10,000 0 1971 1975 1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 Refinery Produc7on Crude Produc7on Transport Consump7on Total Consump7on 9
Economic Impact Provides critical infrastructure Meets demands of domestic and international investors Allows large container ships to call directly at the largest market in SEAsia Changes capability from 5,000 TEU to 18,000 TEU Removes cost of transhipment in Singapore Reduces sea freight costs for imports and exports Provide strategic tank storage for major population and industrial centre Opens Indonesian/Java market to Aframax Tankers Allows safe break down of import cargoes to serve smaller islands Alleviates chronic traffic congestion in existing port Increases container truck turns to Bekasi (Industrial Area) from 1 to 4 every day Reduces domestic logistics costs Stimulates economy Could add 2% to GDP growth Creates 60,000 direct jobs and has multiplier effect through the economy 10
Who finances what Others Superstructure US$710 M US$1,320 M Others Financed by toll road and/or power plant operators Financed by other stakeholders interested in industrial park, etc. Superstructure Financed by container and product terminal operators Financed by asset based financiers (equipment financing, construction contractors, etc.) Infrastructure US$2,630 M Infrastructure Financed by IPC s equity contribution: IPC to raise debt to partially finance its equity contribution Financed through project financing (e.g. banks, ECAs, MLAs, etc.) using the project vehicle (SPV) Financed by asset based financiers (equipment financing, construction contractors, etc.) 11
Project structure 1. Bankable CA + Presidential Decree Common infrastructure CTs & PTs Superstructure 2. Set up SPV = DevCo Develop, finance and construct the project and to operate the common infrastructure CTn 3. Set up holding or operating companies for CTs/PTs CT2 CT1 CT Op Co Holding IPC SPVs = DevCo IPC Concession Agreement Shareholders Agreement / Sublease Agreement PT1 PT2 PT Op Co Holding GOI/DGST Sub-lease Agreement 4. Sub-lease to Op Cos to operate the terminals PTn 5. Sale of stakes in CTs and PTs to operators All Infrastructure included in Dev Co 12
Financing structure Construction of common infrastructure to be financed through bank debt and an equity contribution from IPC Debt financing Banks IPC Equity financing SPVs/DevCo Cash Construction of common infrastructure Banks Debt financing Lease payments Terminal operators Equity financing OpCos Cash Procurement of equipment Banks Debt financing 5 terminals Terminal equipment will be financed through bank debt and equity 13
What is needed? 14 Container Terminals Operators & investors Container handling equipment suppliers Cranes Fork Lifts Head Trucks Operating systems, accounting & information systems Training & support Tank Terminals Operators & investors Tanks contractors Monitoring & instrumentation providers Operating systems, accounting & information systems Training & support Others Toll road operators Power systems suppliers Finance Equity investors Bond purchasers Debt providers Equipment finance
Development Program: Phase 1 Overview of key operation start up dates 2013 2014 2015 2016 2017 2017-2025 2025 onwards CT1 4Q2013 construction starts 4Q2014 COD (0.8m TEU p.a.) 2017 buildup (1.5m TEU p.a.) Lease ends in 2044 CT2 4Q2014 construction starts 2Q2016 COD (1m TEU p.a.) 2018 buildup (1.5m TEU p.a.) Lease ends in 2045 CT3 3Q2016 construction starts 4Q2017 COD (1m TEU p.a.) 2020 buildup (1.5m TEU p.a.) Lease ends in 2047 PT1 3Q2014 construction starts 1Q2016 COD (500m 3 capacity) Lease ends in 2044 PT2 3Q2015 construction starts 1Q2017 COD (500m 3 capacity) Lease ends in 2045 Note 1 Commercially Operational Date ( COD ) period represents first complete quarter of operations 15
Key Dates Container Terminal 1 Operations Contract Preferred Bidder signs Memorandum of Agreement today Container Terminal 2&3 Selection Process Registration open during this conference First round non-binding bid March 2013 Second round RfP July 2013 Award by end Q4 2013 Product Terminal 1&2 Selection Process First round RfP April 2013 Shortlist and second round RfP August 2013 Award by end Q3 2013 DevCo Equity and Debt Closing Q3 2013 16
Key Contacts: www.indonesiaport.co.id R J Lino President Director of IPC the Project Sponsor Email: rj_lino@indonesiaport.co.id Supported by Dani Rusli CEO of Development Company Email: dani@indonesiaport.co.id Retno Head of Strategy Bureau, IPC Email: retno@indonesiaport.co.id Oliver Goetz Rothschild, Financial Advisor Email: oliver.goetz@rothschild.com David Wignall DWA, Commercial Advisor to IPC Email: David@DavidWignallAssociates.com 17