Indonesia’s Batam port to get USD85 million upgrade to compete with Singapore port

State port operator Pelindo I’s President Director Bambang Eka Cahyana announced an IDR 1.2 trillion (USD85 million) financing investment into Indonesia’s Batam port on April 2. The investment will upgrade facilities at the port of Batu Ampar to improve cargo handling and boost the port’s competitiveness. Previous reports have indicated Indonesia’s motivation is to position Batam as an alternative shipping hub to Singapore and to draw new investment into the region. The Batu Ampar port is located less than 30km south of Singapore, facing the Singapore Strait.

Vice President Jusuf Kalla says the Batam Ampar port currently incurs many “unnecessary costs” leading to high logistics expenses, including paying for container inspection fees carried out in Singapore. Improvements to shipping standards will commence this month, with the port accepting delivery of 12 terminal tractors and three new mobile harbour cranes. Medium term, the investment will secure container cranes capable of loading and unloading goods for larger ships. Cahyana is confident the additional equipment will boost productivity at the port and reduce operating costs.

The Port of Singapore is the world’s second-busiest port in terms of total shipping tonnage. While Indonesia may aspire to entice customers and investment away from Singapore, they’re not the only player in the game. Malaysia recently unveiled a USD180 million investment into the development of Johor’s Port of Tanjung. The project will transform the port into the world’s biggest ship-to-ship transfer hub with an ability to accommodate up to 30 vessels simultaneously, and 9 million tonnes of petroleum products. The transfer hub allows ships to transfer cargo to each other while avoiding the need to dock at the berths, cutting costs and improving flexibility.

The two-year project is a collaboration between Hong Kong-based port operator Hutchison Ports Holdings and Malaysia’s maritime services company KA Petra.