PELINDO II PLANS $1-BILLION BOND OFFERING TO BUILD THREE NEW PORTS
Jakarta, 9 Muharram 1436/2 November 2014 (MINA) –State-owned port operator PT Pelabuhan Indonesia II (Pelindo II) plans to issue US$1 billion in bonds in the second quarter of next year to finance the construction of its three new ports in the country.
Pelindo II president director Richard Joost Lino said Friday that the new ports would be built in Tanjung Api-Api, South Sumatra, in Sorong, West Papua, as well as in West Kalimantan.
“We will issue the bonds in April next year to reap $1 billion in funds for financing the new ports’ construction, which will kick off in the third quarter next year,” he said, The Jakarta Post quoted by Mi’raj Islamic News Agency (MINA) as reporting.
Pelindo II aimed to finish the construction of all three ports in around two-and-a-half years, Lino said.
“The new ports in West Kalimantan and Sorong would cost around Rp 3 trillion [$248.4 million] to Rp 2 trillion,” he said, adding that the remainder of the $1 billion fund would be used for the construction of the Tanjung Api-Api port. Lino said the Sorong port would have the capacity of 500 to 600 twenty-foot equivalent units (TEUs).
The construction of the three new ports was part of Pelindo II’s expansion program to support the government’s long-term plan to make the country a maritime axis.
President Joko “Jokowi” Widodo, who was inaugurated on Oct. 20, has taken a firm stance that his administration would place a particular focus on developing the country’s maritime potential.
Jokowi has reinstated a maritime-axis platform that involves a sea toll and modern fishing ships, among other things. The sea toll will be mainly aimed at providing greater cost efficiency for sea transportation.
In an effort to realize the platform, Lino has previously stated that Pelindo II aimed to construct and develop 22 sea ports in the country.
“We are targeting to build or develop 22 seaports from Belawan to Sorong within five years, under a budget of around $5 billion to $6 billion,” Lino said previously.
Pelindo II would seek external funds to finance the projects, such as through loans, bonds or partnerships, he said.
- The $1 billion in bonds will be offered to investors next year
- Three ports will be built — in South Kalimantan, West Kalimantan and Papua
- Pelindo II plans to build 22 ports within five years
Lino previously indicated that his firm would probably look to the global bond market as he previously told reporters that his firm would carry out road-show presentations in Europe.
He added that the development of the 22 seaports was of great importance because it could increase the country’s economic growth rate by around 0.31 percent to 0.78 percent.
Pelindo II, which operates ports in the country’s western and central regions, previously secured a $1.2-billion loan from foreign banks, namely Deutsche Bank, ANZ, Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui Banking Corporation, Mizuho Bank, Societe Generale and United Overseas Bank.
The firm also got $1.3 billion from a joint venture with Japanese firm Mitsui & Co. Ltd.
The $2.5-billion fund is being used to finance the development of the New Priok Port in North Jakarta.
Pelindo II, which pocketed Rp 2 trillion in net profit last year, is not the only port operator aiming to help realize the president’s maritime-axis vision.
Pelindo III and Pelindo IV have previously stated that they would repair 24 ports in the country’s eastern region to accelerate the implementation of the sea-toll project.
Among the seaports being focused on are Tanjung Perak Port in Surabaya (East Java), Benoa Port in Bali and Bagendang Port in Sampit (Central Kalimantan).
Pelindo III, which operates 24 sea ports in Java and Kalimantan, is aiming to raise investment funds of up to Rp 10 trillion to develop international-level ports.
Pelindo IV, meanwhile, is focusing on improving the capacity of 10 major and feeder ports to facilitate passenger and cargo traffic at its operated sea ports.(T/P009/P3)
Mi’raj Islamic News Agency (MINA)
