City of Rotterdam and the City of Jakarta have a sister city relation since 1983. The Port of Rotterdam is a corportised organisation:100% of its shares are owned by the City. City of Rotterdam and the Port of Rotterdam have offered the Port Analysis Model to the City of Jakarta. The Port Analysis Model (PAM) is a strategic analysis and benchmarking instrument for ports within their surroundings.

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Seminar, Jakarta
21st and 22nd March 2005
By Capt. Kees Weststrate
Sr.Business Development
Manager

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Content
1. Introduction
2. Findings of Port Analysis Model per theme
3. Cobwebmodel
4. Issues, Challenges and Recommendations
5. Conclusions

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Introduction
 City of Rotterdam and the City of Jakarta have a
sister city relation since 1983
 The Port of Rotterdam is a corportised organisation:
100% of its shares are owned by the City
 City of Rotterdam and the Port of Rotterdam have
offered the Port Analysis Model to the City of
Jakarta:
 City paid all expenses
 Port provided manpower

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Port Analysis Model (1)
 The Port Analysis Model (PAM) is a strategic
analysis and benchmarking instrument for ports
within their surroundings
 Different units and dimensions of analysis are
combined in PAM

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Port Analysis Model (2)
 The core of the model is a quantified checklist is
built up using a tree-structure
 The theme’s of the PAM Jakarta study are: general
characteristics, port characteristics, institutional
environment, investment climate, geography and
hinterland connections

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Content
1. Introduction
2. Findings of Port Analysis Model per theme
3. Cobwebmodel
4. Issues, Challenges and Recommendations
5. Conclusions

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General Characteristics
 Indonesia still faces some economical development
challenges (IMF, trade facilitation et cetera)
 Indonesia has enormous potential due to huge
national resources
 Cheap labour is a major competitive advantage for
production and processing industries
 Tj. Priok has a central location on Java near the
main production and consumption centres
 Tj. Priok has the potential to operate as a hub

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Port Characteristics (1)
Variety of cargo activities as:
 Containers
 General cargo
 Ro-ro
 Dry and liquid bulk
 Passengers

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Port Characteristics (2)
General:
 Two container terminals up to international
standards
 One multi-purpose terminal (containers and general
cargo) and several general cargo terminals
 Variety of nautical/maritime services such as dry
dock, ship’s cleaning and repair yards

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Port Characteristics (3)
Nautical accessibility:
 Port entrance too small for the larger container
vessels
 Number of anchored vessels nearby entrance
channel and between the breakwaters can create
dangerous situations
 ISPS approved, however no restrictions to enter
several facilities without identification

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Port characteristics (4)
Infrastructure:
 Land access problems with only two gates
(container terminals have their own)
 Infrastructural challenges
 Multitude of conflicting port development plans

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Institutional environment (1)
Objectives Port of Rotterdam
 High quality and a reliable services
 Good nautical accessibility
 Sufficient space for developments
 Realisation of sufficient economies of scale
 Safe and secure port
 Sustaining and developing clusters of activities:
stimulating co-siting and innovation
 Un-locking of multi modal connections to the
hinterland (dedicated rail and inland shipping)
→ In order to achieve these collective goals all the stakeholders
have to be involved and be in agreement with each other:
stakeholder management!
→ Both the local and central government are actively involved in
the port
→ The Port does what is has to do to stimulate and facilitate
business, but leave to the market what can be done by the market

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Institutional environment (2)
Role Pelindo is not clear; conflict of interest:
 Pelindo acts as landlord port manager
 Pelindo acts as terminal operator: competing with
own clients
 Within the Pelindo organisation various ports are
competing with each other

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Institutional environment (3)
Government involvement is not in balance:
 Central government controls Pelindo
 Local provincial government is not involved
 Co-operation and co-ordination between different
government agencies is limited
 Challenge: according to publications in Kompas (18-
02-05) all Pelindo organisations will be merged into
one organisation and it will be possible for local
government (s) to participate through shareholding

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Investment climate
 Favourable taxes and incentives for foreign investor
 High number of Asian foreign direct investors
 Port seems to be less open for foreign investor
(exceptions for HPH)
 Jakarta provincial Government is investor-friendly
 Legally uncertainty is still a major issue (example:
ownership of land only for Indonesian nationals)

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Geography
 Port is surrounded by the city
 The only opportunity to extend the port is through
land reclamation
 For the port extension it is necessary to reorganise
the infrastructure in the Koja-area

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Extension plans Jakarta New Port

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Hinterland connections (1)
By road:
 From the province of West Java, (Bandung area)
the main producing area for garments, textile and
food approx. 80% of export is via Tj.Priok mainly by
road.
 Small truck deliver non-containerised cargo via
Puncak pass with dense traffic
 Container trucks are routed on toll road via
Cikampek

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Roads on Java

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Road and traffic Jakarta

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Hinterland connections (2)
By rail:
 There is an excellent rail connection between Bandung Dry
Port and Kampung Koja.
 There is no rail connection from Kampung Koja to the
container terminals in Tj.Priok
 Transit from rail terminal to container terminals vary between 7
and 14 days
 Rail transport is more expensive than by truck (due to more
handlings and higher lifting costs)
 Only normal 20´and 40´containers can make use of rail
highcubes are not accepted (tunnels)
 No governmental incentive system for modal shift

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Rail terminal Bandung

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Hinterland connections (3)
Inter-insular traffic:
 Most of operations take place at smaller terminals,
mixed with international cargoes
 Volume in 2004: 29.1 million tons
 Most cargo is not containerized
 Customs have problems with identifying
international and domestic cargoes

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Content
1. Introduction
2. Findings of Port Analysis Model per theme
3. Cobwebmodel
4. Issues, Challenges and Recommendations
5. Conclusions

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Cobweb model: scores per theme
Cobweb model
Total score
0
1
2
3
4
5
6
7
8
9
10
General characteristics
Port characteristics
Institutional environment
Investment climate
Geography
Hinterland connections
Tanjung Priok

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Content
1. Introduction
2. Findings of Port Analysis Model per theme
3. Cobwebmodel
4. Issues, Challenges and Recommendations
5. Conclusions

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Issues, Challenges and
Recommendations
 Nine topics have been selected:
1. Strategy
2. Legal framework
3. Comprehensive co-ordination
4. Cost and benefit allocation
5. Port ownership and control
6. Access improvement
7. Transportation efficiency
8. Land acquisition
9. New port development

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Deciding upon one national strategy for the
transportation and port sector
 Clear policy framework stating concrete goals,
strategic considerations and pre-conditions for
development;
 Providing criteria for deciding on the priorities for
port and infrastructure development;
 Local (master)plans on provincial and municipal
level have to fit within policy framework;
 Concrete goals and plans make good planning and
control possible!
①

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Improvement of legal framework for
transport sector
 Reduce lack of clarity: providing security for private
sector (especially foreign investors);
 Clear allocation of tasks and responsibilities for
different governmental organisations: government
governance*;
 Short term issues: extension of toll roads require
governmental licences which is time-consuming and
the central government has marked the port as a
vital asset, preventing local government
involvement.
②
* the processes and systems by which a government operate

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Balancing acts: trying to reach an
equilibrium in central and local government
control over the port
Today central government involvement is too
extensive and local government is too limited
②

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Creation of a comprehensive co-ordination
structure for the municipality/provincial
government and central government
 Intensify and secure information exchange
(knowledge management);
 Governmental planning & control (co-ordination,
registration and evaluation of activities);
 Discussion platforms (continuous consensus
building).
③

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Cost and benefit allocation
 Financial arrangements to fairly distribute
costs/benefits;
 Local involvement, local financing, local flexibility;
 Example Rotterdam:
 Collects port dues from shipping lines
 Rental income from port premises
 Port of Rotterdam does not pay any taxes over
their income
 Port of Rotterdam pays a fixed contribution of
€ 41.6 million to the Municipality of Rotterdam.
④

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Port ownership and control
 Good port governance: landlord port (facilitate and stimulate);
 Secure stakeholders interest as:
 Local government
 Central government
 NGO’s (Environmental, labour unions etc)
 Private sector parties
 Organising proper control (checks and balances)
 Resolve conflict of interest Pelindo II (terminal participation)
 Rotterdam example:
 No involvement and participation in terminal operations
 Keeping neutrality to all customers
 Proper supervision structure for port management
organisation (balance between autonomy and
accountability)
⑤

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Port Management Models
⑤
Most ports in the world, like the Port of Rotterdam,
operate like a landlord port.

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Improve port access
 A major bottleneck is the land-side access: solve
this problem and the competitiveness will be
increased significantly.
⑥

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An efficient transportation sector
contributes to the competitiveness of a
nation
⑦

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An efficient transportation sector
contributes to the competitiveness of a
nation
 Trucking: quality, insurance, legislation;
 Rail: availability, government incentives;
 Rely on economic / business imperatives (costs,
time, reliability);
 Example: feeder service Tj. Priok – Cirebon
 Economic advantages by reducing transport
time to Europe;
 Lower costs;
 Custom export document in Cirebon (not in
Jakarta).
⑦

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Land acquisition possibilities for
infrastructure development
 Jakarta Raya is faced with several infrastructural
challenges related to quality and availability;
 Speedy infrastructure development is crucial;
 ‘Fast and clean’ land acquisition is a pre-condition
to speedy infrastructure development;
 Japanese government and private companies
pushing to speed up infrastructural developments
by financing study and financing toll road accesses.
⑧

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New port development: possible planning
Short-term Mid-term Long-termShort-term Mid-term Long-term
Optimise Tj.Priok
Improve land- and
sea side access
Development of
complementary
port facilities like
in Marunda
Realisation of
comprehensive
infrastructure
network
Start construction
of Jakarta New Port
(phased development)
Realisation of
Jakarta New Port:
Jakarta as mainport
Positioning
Jakarta as
a world port
⑨

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Multiporting
Deepsea
Carrier A
Deepsea
Carrier B
port 1
port 2
port 3
port 4
Mainporting
Deepsea
Carrier A
Deepsea
Carrier B
port 1
port 2
port 3
port 4
⑨

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Content
1. Introduction
2. Findings of Port Analysis Model per theme
3. Cobwebmodel
4. Issues, Challenges and Recommendations
5. Conclusions

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Finding the right solutions means bringing
all the building blocks together
Strategy
….
Knowledge
exchange
Legal
Framework
….
Governance
stuctures Port
management
model
…..
….
Infrastructure
development
Planning &
control
Communication
Co-operation
Port
development
Co-ordination
….
….
Jakarta-Raya has an enormous potential. If all stakeholders can agree on
common goals and co-operate efficienly, this potential can be unlocked.

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Implementing improvements requires
having a cohesive phased plan of approach
(program management)