Indonesia
Japanese ODA Loan Mid-Term Review Report“The Urgent Rehabilitation Project of Tanjung Priok Port”
External Evaluators: Yasuhiro Kawabata and Hiroshi Aoki
（Sanshu Engineering Consultant）
Field Survey: May-June 2009 and July 20091.

Project Profile

Map of Project Site

1.1

Tanjung Priok Port Container Terminal

Project Objective
The objective of this project is to increase the port capacity and promote efficiency ofshipping by widening and deepening the existing shipping lanes, thereby contributing toenhancement of Tanjung Priok Port’s functions as an international hub port.
The project location is shown in Figure 1.

Figure 1

Location of the Project Site

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1.2

Outline of the Loan Agreement

Approved Amount/Disbursed
Amount (as of end July 2009)
Loan Agreement Signing
Date/Closing Date
Executing Agency
Consulting Services
1.3

12,052 million yen / 0 yen
March 2004 / December 2013
Directorate General of Sea Transportation (DGST)
Under selection process (as of end July 2009)

Background
The project implementation has been delayed since the procurement of a supervisionconsultant has not been completed.

In addition, the scope of works has been modified fromthe original plan. The improvement of Port Inner Roads (part of components with highpriority and urgency) has been commenced with own funds of the Indonesian government.
Hence, it was considered essential to assess the impact on relevance, effectiveness andefficiency of the project scope by a Mid-Term review and make recommendations forimprovement based on the review results and findings.
2.

Mid-Term Review Results

2.1

Relevance

2.1.1

Consistency with national/government policies
The National Development Plan or Program Pembangunan Nasional 2000-2004(PROPENAS 2000-2004) emphasizes the importance of the development of transport
infrastructure, which would be a basis for economic development. It is also considered amajor factor to promote sustainable economic activities and enhance social life activities
including poverty alleviation. Although there is no specific desription on the shipping sector
development, according to DGST the policy agendas within the shipping sector development
strategy program (drafting in 2003) are described as follows;-

enhancement of domestic shipping capacity and competitiveness-

improvement of safety and quality of the shipping services-establishment of legislation and legal system and clarification of roles ofmunicipal government-

management of technology, energy, and costal water-

management of human resources and shipping/maritime industries-assistance/stimulation of local economy and small and medium enterprises inshipping sector

The current Mid-Term Development Program is Rencana Pembangunan Jangka
Menengah 2004-2009 (RPJM 2004-2009) and is comprised of three development agendas:i)establishment of society based on justice and equality,ii)

achievement of a safe and peaceful country, and2iii) achievement of economically and socially wealthy community.
In Indonesia, which is consisted of thousands islands, the maritime facilities (includingport facilities) which carry cargoes and passengers serve a major role for the country’s socialand economic development. Thus, the project is consistent with the current national policy(RPJM 2004-2009).

In addition, the project is consistent with the shipping development

program, or Rencana Strategis (RENSTRA 2000-2004) which was prepared in response toRPJM. RENSTRA 2000-2004 emphasizes strengthening domestic shipping capacity andcompetitiveness. Moreover, the project is in line with Ministry of Transportation’s RENSTRA
2005-2009 which aims to secure safety for marine navigation of vessels.
2.1.2

Consistency with development needs
At the time of appraisal, the water depth of Tanjung Priok Port’s main access channel

was 10-14 meters with one-way navigation. In terms of handling volume and productivity, theport was inferior to international ports in neighboring countries. Also, the container handlingvolume at Tanjung Priok Port was estimated to reach its maximum capacity of 3 million
twenty-foot equivalent units (TEU)1 in 2006.

Thus, it was essential to widen and deepen anaccess channel and expand turning basin in order to promote efficiency for vessel traffic aswell as to meet the increasing demand.
Tanjung Priok Port is the largest port in Indonesia equipped with the complete andlatest Information and Communication Technology (ICT) facility.

Along with Indonesia’s

economic growth, the container handling volume has been increasing year by year, andexceeded its maximum capacity of 3 million TEU, recording 3.98 million TEU in 2008 byenhancing the container handling capacity. Early commencement of the delayed project ishighly anticipated. The improvement of port inner roads (7,180 ㎥), excluding the Pasoso
Flyover section has been initiated with the Government of Indonesia’s own finance. Earlycommencement of the port improvement works including widening and deepening an accesschannel is anticipated to meet the increasing demand.
This project has been highly relevant with the Indonesian national policies anddevelopment needs at the times of both appraisal and Mid-Term review, therefore its
relevance is high.
2.2
2.2.1

Efficiency
Project Outputs
The project scope at the time of appraisal contains widening and deepening an accesschannel, expanding turning basin, and improvement of port inner road of Tanjung Priok Port.
The detailed scope of work is shown below.
1) Civil works
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Source: JICA appraisal documents3

- relocation of breakwater (1,695m)- widening an access channel (existing one-way 125m to double-way 300m)- dredging (average 4m, 8.255 million ㎥)- improvement of port inner roads (7,180 ㎡)
As a part of consultant’s terms of references, review of detailed designs is required, andthus work items and bill of quantities would be revised.

Improvement of port inner roads

Existing breakwater

2) Consulting services
The current Terms of Reference (TOR) for consulting services includes detailed designs,
tendering assistance, construction supervision, and assistance in monitoring and management.
The man-month (M/M) required for the above mentioned services is estimated at 208M/M forinternational consultants, and 322M/M for local consultants.

However, the detailed design

services in the original TOR have been already completed under the JICA’s technicalcooperation, and as for the inner road improvement portion, the construction supervisionneeds to cover only the Pasoso Flyover section.

It is expected that the planned M/M would

be decreased by approximately 10% of the originally planned.
2.2.2

Project Period
The planned project period at appraisal was from March 2004 (L/A signing date) toJune 2010 (construction completion) with a total period of six years and four months.
However, a consultant has not been selected as of end July 2009.
The implementation progress of the project was slow by 2005. After detailed designs
were completed by JICA in March 2006, the process for selection of a consultant proceeded
and a proposal from consultants was submitted in 7 months. Since only a consultant submitted
a proposal, the Indonesian government evaluated that the selection process was invalid
because of incompliance with the procurement guidelines (Presidential decree).

It resulted

in no progress in selection by March 2007. Even though the reselection process was4

commenced later, the process was delayed by the deadline for submission of proposals(August 2008) due to the internal process within the government authorities.

In addition, theprocess was further delayed due to the lengthy internal process for preparation of anevaluation report for JICA’s concurrence during August 2008 - June 2009.
For reference, during four and a half years, from January 2005 to July 2009, two
Ministers of Transportation, three Director Generals of Sea Transportation, and three
Directors of Port and Dredging were assigned.
Assuming that the consultant selection process goes smoothly, the expected
implementation schedule at this moment is as follows:-bidding for civil works: September 2009- March 2011-construction work: September 2011- March 2014-

consulting services: September 2009-April 2014

However, the bidding process for civil works realistically requires at least one and halfyears following the normal procurement procedures.

The planned three-year construction

period seemed to be difficult taking into account the project scope and bill of quantities.
Moreover, if one year retention period is included, the expected final disburse would be
March 2015, and thus the loan closing date needs to be extended by at least one and halfyears even though remaining activities progress smoothly.
2.3

Effectiveness

2.3.1

Quantitative impact
Operation and Effect indicators proposed at the appraisal stage are as follows.

① Operation and Effect indicators
Indicator (Unit)

Status at appraisal(2000)

Benchmark (2 years
after projectcompletion: 2016)
Domestic passengers
(000)
1,672
2,282
International passengers (000)0200
Bag cargo(‘000 ton)
47,96380,829General cargo(‘000 ton)
43,43780,829
Ro/Ro cargo(‘000 ton)
4,801
Ro/Ro
(vehicles)
1,391
Note: 2016 is 2 years after the planned project completion

Based on the results of search for the information and data on the indicators at the
mid-term review stage, it is suggested that the relevant indicators (e.g. ship call, general cargo,
cargo total, container handling volume (TEUs)), available from the official documents such as
the annual report of Tanjung Priok Port should be referred at the post evaluation stage in order5to supplement indicators included in the above table.
At the mid-term review stage, domestic passengers are decreasing year by year due toboost in air transportation and no international ship call (international passengers) is expected.
However, since foreign passenger vessels might call the port upon completion of the project,
it is considered appropriate to monitor these indicators (domestic and internationalpassengers) as operation and effect indicators.
②Internal rate of return
The economic internal rate of return (EIRR) at appraisal was estimated at 19.1%. Since
no construction has commenced at the time of mid-term review, EIRR was not recalculated.
2.3.2

Qualitative impact
Qualitative impacts expected at the appraisal stage were the following and they are stillvalid at the mid-term stage.

2.4
2.4.1

-

improve efficiency of ship traffic and secure safety by upgrading a port-

improve access by upgrading port inner roads

Others (factors that affect project effectiveness and impact)
Coordination with NGO, local universities, etc.
There is no coordination with NGO or local Universities.

2.4.2

Coordination with grant aid and technical assistanceDuring 2002-2003, “The Study for Development of The Greater Jakarta Metropolitan

Ports of Indonesia” was conducted. Also, during 2005 - 2006, JICA conducted the “Detailed
Design study of the Urgent Rehabilitation Project of the Tanjung Priok Port in the Republic ofIndonesia”, as a technical cooperation (coordinated detailed designs), under which detailed
designs and bidding documents were prepared. At the detailed design stage, some of themaster plan design concepts were slightly modified taking the future project plan intoconsideration.
2.4.3

Coordination with other donors

There is no coordination with other donors.
2.4.4

Environmental impact
The Environment Impact Assessment (EIA) was approved by Ministry of Environment

on March 24, 2004.

However, since the project has not started yet even in 5 years after theoriginally planned project commencement date, it is essential for the Indonesian government
to consider the necessity of review of the EIA, including the review of an originally proposed
dumping site of dredged soils. Additional land acquisition will remain minimal since the6

majority of port inner road improvement works take place within the port area.
2.4.5

System, technical capacity, and financial status for operation and maintenance(1) Operation and maintenance system
After the project completion, Indonesia Port Corporation II or PT Pelabuhan Indonesia
II (PELINDO II) will be in charge of the port’s operation and maintenance. The port innerroads will be subleased to PELINDO II upon completion.

PELINDO II’s Tanjung Priok Port

Branch is in charge of the port with 9 divisions under a general manager, having
approximately 860 full time employees and 400 temporary staff. Fifty-one (51) % of total
shares of Jakarta International Container Terminal (JICT) of Tanjung Priok Port,administrated by PELINDO II have been sold to Grosbeak, a subsidiary of Hong Kong’s
Hutchison Group under concession base in 1999.
(2) Technical capacity in operation and maintenanceStaff who are hired to PERINDO II take two-week lecture training on basic port
operation/management followed by one month training on the job, and then is assigned toeach division.

After hired, all the staff are required to take general training at their port

training center at least two days per year, and in addition 60% of staff take specific training
courses every year. Approximately 30 courses are offered at the training center, including
modules on container terminal management, storage management, storage fee collection, andhazardous cargo handling and all the staff are making efforts to improve skill level.
(3) Financial status on operation and maintenance
The profit and loss statement of PELINDO II Tanjung Priok Port Branch for the past
five years is shown in Table 1.
Table 1 Profit and Loss statement of Tanjung Priok Port Branch
Unit: 0.1 billion RPYear2004
2005
2006
2007
2008

Revenue
6,197.1
7,485.0
7,879.2
8,619.7
9,961.5

Operatingexpenses
2,679.9
2,942.8
3,367.0
3,310.0
3,651.5

Extraordinary
profit/loss
-4.9
00
2.1
0Net Profit
3,514.2
4,542.2
4,512.1
5,311.8
6,310.0

Source: Tanjung Priok Port Annual Reports

For the past five years, the revenue and net profit has been substantially increasing.
The breakdown of operating costs of PELINDO II Tanjung Priok Port Branch is shown in
Table 2.

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Table 2

Breakdown of Operating Costs (FY 2008)
Unit: 0.1 billion RP
Item

AmountLabor cost (salary)
Material purchase
Operation and maintenance costs
Depreciation
Insurance
Rental fee(ships, software)
Administration cost
General overhead
Other expenses
Total

1,041.0
848.3
314.0
523.7
16.2
245.5
38.0
343.3
281.5
3,651.5

Percentage（％）
292391407
198100

The annual operation budget is allocated to each port by PELINDO II headquarters.
According to the opinion o f Tanjung Priok Port’s Finance division, the allocated budget isfirst to be used for absolutely necessary items such as labor costs and expenses needed foroperation, and thus budget to be allocated for maintenance (routine works and construction) is
not necessarily sufficient.
3.

Conclusion, Lessons Learned, Recommendations

3.1

Conclusion
Since this project is highly relevant with the Indonesian national policies anddevelopment needs with high priority at the moment, the project implementation needs to beaccelerated.

3.2

Recommendations

3.2.1

Recommendation to executing agencies

1）The original scope of work needs to be partly modified (the majority of port inner road
improvement works have been commenced with the Government’s own funds; detailed
designs have been already completed under JICA’s technical assistance; the necessity ofdesign changes was pointed out at the detailed design stage).
2) Since five years have passed from the originally planned commencement date, reestimationof the project costs is needed taking into account the price escalation and changes in foreignexchange rates.
3) Since the project implementation has been substantially delayed, a new project
implementation schedule needs to be established. In order to accelerate implementation of theproject here after, a procurement implementation plan for selection of contractors needs to bepromptly prepared and the progress should be strictly monitored and supervised so that theworks would progress as planned. . The plan should include the information on the timing of8the following activities: advertisement, Prequalification (P/Q) preparation period, submission
date of P/Q evaluation reports, consent period by JICA, distribution date of bidding
documents, bidding opening date, submission date of bid evaluation reports, consent periodby JICA, negotiation period with the lowest bidder, commencement date by the selectedcontractors. After the project commenced, the progress needs to be monitored against theagreed construction implementation plan. In case any delay of progress is foreseen, executing
agencies together with supervising consultants and JICA needs to discuss countermeasuresand actions to be taken, and supervise so that proposed countermeasures and actions would be
implemented within agreed due date4) Regarding monitoring indicators for cargo, since it is desirable to refer to the relevant
indicators (e.g. ship call, general cargo, cargo total, container handling volume (TEUs))
available from the official documents such as the annual report of Tanjung Priok Port at thepost evaluation stage, it is essential to continuously collect the information and data related tothe proposed indicators. At the mid-term review stage, domestic passengers are decreasing
year by year due to boost in air transportation and no international ship call (internationalpassengers) is expected.

However, since foreign passenger vessels might call the port uponcompletion of the project, it is considered appropriate to keep these indicators (domestic andinternational passengers) as monitoring indicators.
5) The EIA was approved by Ministry of Environment on March 24, 2004. However, since theproject has not started yet in 5 years after the originally planned project commencement date,
it is essential for the Indonesian government to check the necessity of review of the EIA,
including the review of an originally proposed dumping site of dredged soils.

3.2.2

Recommendations to JICA

1) Since review on extension of the loan closing date may be needed depending on theprogress of the remaining implementation schedule with about four and half years delay atthis moment, the information needs to be shared with executing agencies and a consultant tobe recruited, and actions/countermeasures to accelerate the implementation needs to bediscussed.

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