Deadly co-existence at port

What is the newest development at the port, especially Tanjung Priok port of Jakarta? The development of Kalibaru terminals? Yes, that's certainly a good answer. But, there is another of it. So, what is that? That's of the simultaneous establishment of many subsidiaries by the Indonesia Port Corp. (Pelindo) II.

The policy had triggered harsh response from private firms because those newly set-up companies overlap with their existing business venture. Now, the business profile at Tanjung Priok is like this: private firms and Pelindo II (with its subsidiaries) go hand-in-hand. But, they are substantially not in a level playing field. One party is little bit higher than the other. So, it is a deadly co-existence.

According to business associations like the Indonesia Chambers of Commerce (Kadin), the Indonesia Stevedoring Association/APBMI, the Indonesia Port Haulers Association-Organda Angsuspel to mention some of them, the asymetric standing has pushed several members of their association to cease business operation. The others even bankrupt.

Pelindo II always defends that their policy of setting up the subsidiaries, ranging from port developer, IT provider, car terminal operator and others, is not aimed at extinguishing the existing private firms at the Port of Tanjung Priok. Instead, they come into being to speed up port performance. Additionally, the policy is not breaching any of regulations of the port. In other word, they want to say: “We are legally right with that policy.”

What is said by Pelindo II is of nothing to falsify in terms of legal perspective. But, the issue is not only about the legality. And, above the law, there is the ethics, right? So, from the ethics side, what has been stated by the state-owned company that its policy is aimed at speeding up port performance  is a kind of understatement.

By that premise Pelindo II indicates that those private firms are not able to fulfill their business target as demanded by the contract made between them and the company. For your information, pursuant to the regulations, if any business entity wants to do activity at the port, they must get contract/concession from Pelindo. The tenure of the contract is usually 5 years and the investment paid to Pelindo reaches billions of rupiah.

Productivity of private operators at Tanjung Priok port is indeed another menacing problem. Tanjung Priok port’s underperformance if compared to other similar facilities in the region is at certain level due to their slow work. And, in the next turn, this situation is owing to almost-zero cranes investment by the operators.

But, they reprimand that the investment is postponed since the contract is only for 5 years. If Pelindo gives longer tenure, let say 30-40 years, the story might be totally different. “To buy cranes, we have to allocate billions rupiah of money and it won’t certainly be BEP-ed within five years. Additionally, since the contract is offered through bidding process the business is more riskier. Perhaps, the investor is not fit for the next term. How the investment is paid back?” the operators’ argumentation.

Again, we face the question of fairness, equality and this is bloodily true. As written down in the Shipping Act No. 17/2008 the regulatory function (i.e. providing the concession) is reserved in the hands of the government via the Port Authority (PA) while Pelindo I, II, III and Pelindo IV, are only the operator. As the operator all state port companies actually share equal chance with private firms in the business field. But, what is happened? You already know the story.

Except its potential to end private involvement in the port business, Pelindo II policy of setting up subsidiaries is also little bit out-of-date compared with the current business practice. That is, firms are getting more and more focus on core business. For Pelindo II, this means that the company must pay much attention, energy on berthing services and drop irrelevant business ventures like IT provider, warehouse, etc.

If Pelindo II can focus on its core business, our hope to see the company becoming an international player like PSA of Singapore or Hong Kong’s Hutchison may be no longer a dream. So, keep focusing on your track as port operator, Pelindo II. Give chance to your business partners to support you. Let make Tanjung Priok a lively place for business not a deadly one.*****