Profit Sharing at Patimban
The victory of the CT Corp consortium in the pre-qualification for the tender to operate the Patimban Port was planned from the outset. There are indications that it is a way to return favors to supporters of the government.
THE selection of CTCorp Infrastruktur Indonesia as the sole operator of the Patimban Port has triggered suspicion that the majority of the benefits from the Rp43 trillion-mega project will only be enjoyed by those close to the people in power. Since before the tender pre-qualification, there were indications that the transportation ministry wanted the consortium led by tycoon Chairul Tanjung to win.
The machinations were apparent from the way that the tender rules were repeatedly changed. A number of prospective tender participants said that they were unable to take part because of the large number of rules that seemed to favor a particular company to win. For example, the Pelayaran Tempuran Emas (Temas) consortium withdrew in the middle of the process after the appearance of a requirement to have assets of at least Rp16 trillion, which they were unable to fulfill.
Another participant, a consortium of Samudera Indonesia and Jababeka, was able to meet the requirements for minimum assets as its combined assets totaled Rp20 trillion. However, they were disqualified by the licensing requirement. The consortium registered the port company license belonging to Samudera subsidiary Pelabuhan Samudera. This was rejected because the transportation ministry’s tender committee insisted that permits must be owned by companies registering for the bidding, not their subsidiaries.
The matter that raised eyebrows the most was the story behind the failure of Pelindo II. This state-owned company fulfilled all the requirements to win the tender, but did not register following pressure from the transportation ministry. There are reports that Pelindo II CEO at the time, Elvyn G. Masassya, was dismissed because he insisted on participating in the tender to operate the Patimban port.
In Patimban, CT Corp joined forces with Indika Logistic & Support Services, U Connectivity Services and Terminal Petikemas Surabaya. It is widely known that U Connectivity is a subsidiary of TRG Investama, which is owned by Deputy Defense Minister Sakti Wahyu Trenggono. The businessman is known as a major supporter of President Joko Widodo, while the Indika conglomerate is also known to be very close to the government.
Indications of sharing out the spoils at Patimban were reinforced because the construction of the port has been problematic from the outset. Planned as a strategic national project, the port was initially designed to be located in Cilamaya, Karawang, West Java. This location is about 55 kilometers north of the Karawang industrial zone meaning that there were hopes that the port would be able to reduce the congestion around Jakarta’s Tanjung Priok Port, which is managed by Pelindo II.
However, using the excuse that that the waters around Cilamaya are too close to pipelines and rigs owned by Pertamina, the construction area was moved away from the industrial zone to a location 50 kilometers to the east towards Patimban. This is a completely new area and does not even have satisfactory transportation links. As a result, before a toll road can be built, many companies will think long and hard before using the Patimban Port.
The government policy to build a new port near to Tanjung Priok has also been questioned. Priok is a major port with excellent automotive export infrastructure. Without an increase in demand, Priok and Patimban will be competing for the same clients. If companies using Priok switch to Patimban, the government will lose out because the profits from the state-owned enterprise will fall. Meanwhile, if Patimban is underused, the government could face problems paying off the construction loans. It is this lack of strategy over the development of Patimban that has made many people suspect that the project is nothing more than a sharing out of the spoils.