PELINDO II REFUSES TO CANCEL HUTCHISON CONTRACT Po rt operator Pelabuhan Indonesia II has rejected a government request to cancel a contract awarded to Hong Kong-based Hutchison Port Holdings. Why should we ask for the governments permission to renew our cooperation with our partners? Pelindo II president director Richard Joost Lino said, reported The Jakarta Post. We have obtained the rights to control the land, therefore they [the transportation ministry] should not interfere in our cooperation with our partners, he continued. The Transportation Ministrys director general for sea transportation, Bobby Mamahit, previously said that the port operator should have secured permission from the ministry to renew the contract. HPH has been awarded the contract to operate the Jakarta International Container Terminal (JICT) until 2039. Bobby said that Tanjung Priok Port authority had sent a letter urging the firm to cancel the contract as it had failed to comply with the governments procedures. Responding to the letter from the port authority, Lino argued that Pelindo IIs partner, HPH, would not want to seal the deal with Pelindo II without clear legal standing. JICTs area is owned by Pelindo II, unlike Kalibaru land, which is owned by the government. Therefore we dont need permission from the government to renew the contract, Lino argued. Pelindo II signed a contract with HPH earlier this week to renew the Hong Kong firms operation of JICT for another 20 years. HPHs concession to operate JICT – which is a joint venture between Pelindo II and HPH established in 1999 – was due to expire by 2019. Under the agreement, Pelindo II has increased its stake in JICT to 51 percent from the previous 49 percent and HPH will have to pay US$250 million in advances to Pelindo II. Pelindo II, which is currently looking to speeding up the construction of Kalibaru Port in North Jakarta, has also raised HPHs rent from $60 million to $120 million per year. The firms corporate secretary, Rima Noviyanti, said that Pelindo II decided to ask HPH to renegotiate the contract before the end of the term because the firm needed additional funds to construct Kalibaru. More than half of the $250 million advance will be used to accelerate the construction of Kalibaru, Rima said. In April, Pelindo II established a joint venture with Japanese conglomerate Mitsui Co to operate the first container terminal at Kalibaru Port, which is expected to begin operations in mid-2015. The first terminal will have a total capacity of 1.5 million TEUs and it will cost $393 million, which according to Lino will be fully financed by Mitsui. Our development plan is integrated, so we will also use the funds to improve facilities at other ports including Sunda Kelapa, Bengkulu and Pontianak, Rima added. She also said that the State-Owned Enterprises Ministry had given the firm permission to renew the contract and that Minister Dahlan Iskan would soon sign the approval letter. Separately, the chairperson of the Indonesian National Shipowners Association (INSA), Carmelita Hartoto, questioned the contract renewal that was agreed during the current administrations last days in the office.
Posted on: Mon, 11 Aug 2014 20:55:57 +0000
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