（On-site Evaluation: June 2007）
Ex-Post Monitoring of Completed ODA Loan ProjectEvaluator: Koichiro Ishimori, Value Frontier Co., Ltd.
Project Name: Indonesia Semarang Port Development Project (2-1,2-2)（L/A No. IP-379, IP-393)
Loan Outline
Loan Amount/Disbursement Amount
Phase I:
Phase II:
Loan Agreement
Loan Completion
Ex-Post Evaluation
Executing Agency

:::
:
:
:
:

11,120 million yen /6,621 million yen
7,530 million yen /4,918 million yen
3,590 million yen /1,703 million yen)
September 1991 (Phase I), October 1992 (Phase II)
October 1999 (Phase I), November 1999 (Phase II)
FY2002
Republic of Indonesia / Directorate General of Sea Communications (DGSC)

Project Objective
By improving and constructing container pier and yards, and procuring machinery and materials for Semarang Port on the island of Java, this project aimed to meet theincreased demand for container transport at Semarang Port, and thereby help stimulate the region's economy.
Consultants: Japan Port Consultants (Japan), PT. Wiratman & Associates (Indonesia), etc.
Contractors: PT SAC Nusantara (Indonesia), PT Kalirayasari (Indonesia), Yala (Indonesia) (JV), Nissho Iwai, Tomen Corporation, etc.
Overview of Results
Item
At Time of Ex-Post Evaluation
Effectivenessand Impact

At Time of Monitoring
Since the ex-post evaluation, the volume of container freight handled has increasedby an average of 7% per annum. Average demurrage time has remained very short(1 hour) and thus efficiency has been high. In addition, the project has madecontributions to the regional economy and has a large impact.

Effectiveness(1) Improvement of Services at Container Facilities (Average Demurrage(1) Improvement of Services at Container Facilities Average Demurrage Time(Days / Ship))
By improving the container facilities, the time associated with unloading Due to the improvement of the container facilities at Semarang Port, cargo
cargo has been greatly decreased, and the time that ships spend waiting handling operations have become extremely efficient. Since 2000, the year in
has also fallen. The time needed to perform operations can now be which the ex-post evaluation was conducted, the period of time that ships wait
at sea has been maintained at about 1 hour per ship.
predicted, and port management has become efficient.

Time (Days / Ship))Terminal personnel are more precisely informed of unloading timing by
the cargo owner, and so customer satisfaction has also risen.
• Time Ships Spend Waiting At Sea (Average Demurrage Time) (Days / • Time Ships Spend Waiting at Sea (Average Demurrage Time) (Days / Ship))Ship))
1 hour (2001 - 2006)
48 - 72 hours (1991)
5 - 7 hours (1997)(2) Volume of Container Freight Handled (tons)
1 hour (1998 - 2000)
Thanks in part to the increase in the export of goods (especially furniture) fromCentral Java province, the annual volume of container freight handled has(2) Volume of Container Freight Handled (tons)
increased by an average of 7% per annum, from 1,942,259 tons in 2000 (theBuilding container facilities has made transport of containers in and out year of the ex-post evaluation) to 2,998,183 tons in 2006.
of central Java smoother. As shown in the table below, the amount ofcontainer freight handled has risen an average of 17% per annum, from569,000 tons in 1991 to 1,942,259 tons in 2000.
Fig 1: Handling of Container Freightat Semarang Port
3,500,000 ton

Fig 1: Handling of Container Freightat Semarang Port

3,000,000

Constructionof Container
Construction ofPier
Container Pier
Completion of

2,500,000
2,000,000
1,500,000

Project
Completion

1,000,000
500,0000
2001

Source: Semarang Port Office

2002

Source: Semarang Port Office

2003

2004

2005

2006 year

(3) Occupancy of Berths (%)* Basic indicator not gathered at the time of the ex-post evaluation.
NA% (at time of 2000 ex-post evaluation)(3) Occupancy of Berths (%):
Because usage by shipping companies tends to be concentrated on Fridays,
Saturdays, and Sundays, figures range from 30% - 42% (2001 - 2006). (65% 91% accomplishment of two-berth* target (46%)* Two berths were constructed through this project.
50 %4030201002001

2002

2003

2004

2005

2006

year

Source: Semarang Port OfficeImpact(4) FIRR (%): 23%（Calculation Basis) Based on actual cost and benefit of handling
container freight (details unclear, however). Calculated on theassumption that benefit in years after 1999 was the same as for benefit
in 1999.

(4) FIRR (%): 34%（Calculation Basis) Calculated taking project construction costs and operationand maintenance fees for container facilities as costs, and the Semarang Port
Office operating profit deriving from container usage as benefit. Benefit since1999 was assumed to be the same as that for 1999, the year in which theex-post evaluation was conducted. Because it has in fact improved over thatlevel, FIRR has shown improvement.

(1) Impact on the Regional Economy
Due to the increase in container freight handling at Semarang Port, newcontainer routes have been opened up between Indonesia and Malaysia,Taiwan, Japan, China, and the Philippines. Trade opportunities haveincreased as a result, and there has been a large impact on the regionaleconomy.

(1) Impact on the Regional Economy
GRDP (Million Rp.) for Central Java Province, where Semarang Port islocated.
GRDP has steadily increased from 73,988,511 in 2000 (the year of the ex-post
evaluation) to 146,939,394 in 2005. In recent years, the furniture industry has
been promoted in Semarang City and the city's suburbs. Because this project8 0 ,0 0 0 ,0 0 0

has helped support the export of furniture, it is considered that the project iscontributing to the increase in GRDP of Central Java Province, where
Semarang City is located.

GR DP(M illio n R p.)

6 0 ,0 0 0 ,0 0 0

160,000,000

4 0 ,0 0 0 ,0 0 0

GRDP (MillionRp.)

140,000,000

2 0 ,0 0 0 ,0 0 0

120,000,00001997

1998

1999

2 0 0 0 ye ar

100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
02001

2002

2003

2004

2005 year

Source: Indonesia Statistics Bureau(2) Impact on the Environment
No problems worthy of note.

Survey of Beneficiaries (Complementary to the Analysis of Impact on theRegional Economy)
A survey of beneficiaries was conducted on 15 companies that use the container
yard at Semarang Port. All 15 companies reported that the project had helped
increase their company's trade volume (the export of furniture and other goods)
and to increased earnings thanks to that trade. One of those companies had athree-fold increase in earnings thanks to heightened trade between 2000 and2006. With respect to the issue of services provided by the Semarang PortOffice (procedures for ship entry and exit from the port, as well as theadministration of taxes on imported and exported commodities), 11 companies
reported that they were satisfied with the services, and four reported that they
were dissatisfied on account of procedural delays.

(2) Impact on the Environment
An environmental impact assessment is conducted twice annually by theSemarang Port Office, which is under the jurisdiction of the project's executing
agency(DGSC). According to those assessments, the project has had nonegative impact on the environment.

SustainabilityThere are absolutely no problems with technology, system, or finances, nor
are there any problems with the maintenance or operation of facilities ormachinery built or provided through this project. However, for an externalreason that ground subsidence for the Semarang Port has been a serious
problem, and sustainability is extremely concerned.

(1) Technology: Manager-level training is performed at Surabaya, andgeneral employee training is conducted at Semarang Port. In addition,
training on the computer-based container handling system introduced
under this project is performed by employees with sufficient experience.

(2) System: The Semarang Port Office is a state-run business 100%
financed by the government. It is an office of Indonesia PortCorporation III (IPCIII), headquartered in Surabaya. The company isin charge of operating and maintaining 37 ports, including Semarang
Port. At the end of 2000, the Semarang Port Office has 424
employees. There are plans to entrust container freight operations toprivate entities.

(3) Finances:
From 1997 - 1999, IPC III's operating revenue averaged 52% of total
revenue, and profitability was high. Administrative conditions wereextremely stable, with current ratio averaging an 362%. In addition, from1998 - 2000, operating revenue averaged 67% of total revenue for
Semarang Port, and profitability was extremely high. Current ratio
averaged 324%, and administrative conditions were extremely stable.

(4) Operation and maintenance conditions:
The facilities and machinery built or provided through this project are
well managed. In 2001 the port acquired ISO9002 certification. The
container handling system has been operating smoothly.

(1)Technology: Manager-level training is performed at Surabaya, Tanjung
Priok, Jakarta, etc. and training for general employees is performed at
Semarang Port. Training on the computer-based container handling system
introduced under this project is also currently being conducted by employeeswith sufficient experience. Furthermore, an operation and maintenance manual
updated as necessary is distributed to all employees, and operation andmaintenance is performed on facilities daily. Overall, the technical capability ofthe Semarang Port Office is high.
(2) System: The Semarang Port Office continues to be a state-run business
100% financed by the government. It is an office of Indonesia Port Corporation
III (IPCIII), headquartered in Surabaya. The company is in charge of operating
and maintaining 45 ports, including Semarang Port. As of 2007, the Semarang
Port Office has 339 employees.

(3) Finances:
From 2000 - 2006, IPC III's operating revenue averaged 48% of total revenue,
and as before, profitability remains high. Current ratio averaged 321%, andadministrative conditions were extremely stable. In addition, from 2001 - 2006,
operating revenue averaged 69% of total revenue for Semarang Port. (Otherrevenue derived from fixed assets sale and gains from investment activities.)
Profitability was extremely high, current ratio averaged 402%, andadministrative conditions were extremely stable.

(4) Operation and maintenance conditions:
In 2007, the year in which this survey was conducted , the facilities andmachinery built or provided through this project are well managed. The
container handling system has been operating smoothly. However, excess
pumping of underground water throughout Semarang City, including theSemarang port area, has caused the Semarang Port container yard to sink anaverage of 25cm per year. (At the time of this survey , port employeesmeasured the container yard's elevation above sea level at measurement point(1) on the attached map. Whereas the elevation was 3.12m in 2000, it was only
1.36m in 2007.) Should the current trend continue, then the container yard isexpected to begin to suffer damage in rainy seasons or at high tide by 2011, andby 2013 at the latest, the entire container yard is expected to be submerged.
(2008: 1.11m/2009: 0.86m / 2010: 0.61m / 2011: 0.36m / 2012: 0.11m / 2013:0.14m). In addition, the yard behind the general cargo terminal is sinking at anaverage of 25cm per year. At one of the four measurement points (labeled 2, 3,4, and 5 on the attached map), the rate is 29cm per year (pt. 4), and the sea level
ordinarily rises above land level. (The yard was 1.83m above sea level in 2000,and only 0.20m above in 2007.) The land-based facilities (freight station, andthe like) are in ruins. If the rate of subsidence continues, the ordinary seal levelis predicted to rise above the other three locations by 2010 at the latest. At thesame time, the Semarang Port Office is consumed with daily operation andmaintenance tasks. They are not paying attention to the sinking land, which isundermining their work, and are not taking any countermeasures against thisproblem (It is considered that at the point of the ex-post evaluation, the problem
of sinking land had not yet been brought to light).
In conclusion, Semarang Port is suffering from severe land subsidence, andoperation and maintenance conditions continue to be a major concern.
Sustainability is highly questionable, and the issue may have a negative impact
on future effect and impact.
Lessons learned and recommendations
Lessons
None
Learned,Recommenda
tions,
Information
ResourcesandMonitoring
Methods(1) Lessons
learned at
the time of
ex-postmonitoring
andrecommend
ations forsecuring
sustainabilit

As explained above, on account of external factors, namely, the excessive pumpingof groundwater, the Semarang Port grounds are continuing to sink rapidly. It ishoped that the container yard (or all of Semarang Port) will be swiftly rehabilitated(countermeasures for the subsiding ground level). In addition, it is hoped that supply
and demand of water be managed for all of Semarang City to contribute to thefundamental solution of the sinking land of the port.

(1) Lessons
None.
(2) Recommendations for the Semarang Port Office and DGSC
In order to preserve this project's high rate of efficiency and impact long into
the future, urgent measures are needed to counter the ground subsidence of allof Semarang Port caused by excess groundwater being pumped out. But asstated under "Operation and Maintenance Conditions" above, it is hoped thatsuch rehabilitation measures would not target just the container yard project
area, but the whole of Semarang Port.
Recommendations for the Semarang City government, the Central Java

ton
3,500,000
3,000,000
2,500,000yProvince government, and the Indonesian government (public project
ministries, and the like).
As the fundamental cause of ground subsidence at Semarang Port is excessive
pumping of groundwater throughout Semarang City, a fundamental solution tothis problem is needed. The following two approaches must be taken.
The first is demand management; that is, control over the amount ofgroundwater pumped out. To that end, legal measures that strengthen
regulations on pumping water and an enforcement system for same (including
monitoring and punishment of violators), together with economic measures
including reform of water rates (price hikes), and educational measures
including information campaigns to conserve water need to be undertaken.
The second is supply management; that is, cultivation of groundwater and of
the water supply originating from groundwater. To that end, plans are needed toprovide new infrastructure for supplying water.
In response to the above circumstances, the JBIC signed another loanagreement, Integrated Water Resources and Flood Management Project for
Semarang, in March 2006, establishing the following concrete flood control andwater supply measures.
1. Improvements along the Garang River (river improvement, drainage channelcollection, fixed weir rehabilitation, bridge raising)
2. Improvement of municipal drainage facilities (improvements along theSemarang River, improvement of a drainage pump station)
3. Jatibalan Station Target Dam Construction (construction of a multipurpose
dam, construction of a conservation and sand erosion control dam in theupstream region)
In addition, the Indonesian government is contemplating rehabilitation
projects to raise breakwaters and piers in Semarang Port.
These measures are considered to help provide fundamental solutions for thisproject.