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| More than 50,000 vessels per year transit the 621 mile long Strait of Malacca. Linking the Indian and Pacific Oceans, the Straits of Malacca is the shortest sea route between three of the world's most populous countries -- India, China, and Indonesia. Image credit: baliwww.com |
Irish State-owned Dublin Port Company is closr to agreeing a joint venture with the Indonesian government to build a $900m container terminal in Sabang Port in Aceh.
The 50-50 joint venture involves setting up a new company, Sabang Hub International Port, which is likely to be operating within three months.
The company plans to build a 2,500 metre quay and a 22-metre deep harbour. The contract to operate the terminal will last for 50 years.
The Financial Times says that Sabang was a busy port until the 1970s when a separatist insurgency erupted in Aceh. It was declared a free port in 2000, but its development was hampered by the conflict, which ended in 2005.
Irwandi Yusuf, who became Aceh’s first directly elected governor last December, has said he is keen to turn Sabang into a world-class industrial zone.
There are already at least three big ports in the region: Singapore, Tanjung Pelepas and Port Klang.
The FT quotes an unnamed person working in the industry in the region: "They're going to have very, very competitive handling rates to attract business. It seems a strange place for Dublin Port to choose for their first overseas project."
The two sides have agreed to form Sabang Hub International Port, an equal-share joint-venture company that is likely to be up and running by July, according to Saiful Achmad, head of the Sabang Free Trade Zone Management Board.
“Everything has been approved. We’re just waiting for the signatures of the senior officials on both sides,” Saiful told the FT. “Our plan is to build a quay 2,500m long, and the harbour will be 22m deep. The contract will last for 50 years.”
Around 35 percent of the world's trade cargo is routed through the strait. About 200 foreign cargo ships pass Sabang every day.
The port's existing pier is 180 meters long and 12 meters wide, capable of accommodating a ship with dead weight capacity of up to 10,000 tons.
The following statement was issued on behalf of Dublin Port Company today:
Contrary to reports in the international media to-day, Dublin Port Company wishes to clarify that it has not signed a $900 million agreement to develop a port at Sabang Aceh in Sumatra, Indonesia.
Dublin Port Company has, with the encouragement of the Taoiseach and appropriate Ministers, been exploring investment possibilities abroad for a number of years.
In May of 2006, at the request of the Indonesian authorities and following a visit by the Governor of Aceh to Dublin, a Memorandum of Understanding between the Company and the Achenese authorities was signed.
At that time the Company committed to continuing negotiations with a view to agreeing a joint venture, the purpose of which will be to assist and advise the local authorities in Aceh to develop ports and related maritime business in the Sabang area.
In the intervening period negotiations have progressed to the point where we shortly hope to be putting proposals to our board and subsequently to the appropriate Ministers for their consideration and subject to their consent.
It is hoped that the port of Sabang could eventually become an International hub container transhipment port for South-East Asia. Such developments require extensive consideration and long-term planning.
