The government and state owned enterprises have sent a strong signal that they will strengthen the role of Tanjung Priok Port as an international trade hub, taking over a slice of the transshipment market currently dominated by Singapore.

Transportation Ministry Director General for Sea Transportation Antonius Tonny Budiono said the government and state-owned port firms, Pelindo I, II, III and IV, were discussing the so-called Indonesia Integrated Chain Port plan, which would consolidate the export of cargoes from various domestic ports nationwide, including Bitung Port in North Sulawesi and Sorong Port in West Papua, with the country’s busiest port.

Such consolidation is aimed at making the transshipment more efficient and “attractive” for both local and global shipping lines.

“The transshipment sector has long been dominated by Singapore. [But] If the commodities originate in our country, why can’t we handle them?” he said over the phone on Tuesday.

Tonny said the ministry would prepare technical and regulatory matters for the system, while also laying out the business plans with the State-Owned Enterprises (SOE) Ministry.

The system, including IT management, is set to become effective in the second half of this year.

“It’s already settled. The only remaining concern is the business plans [of each Pelindo],” Tonny said, claiming that infrastructure-wise, Tanjung Priok was ready to play a bigger role as an international hub.

The ministry sparked controversy when it recently revised the national ports plan (RIPN) through Transportation Ministerial Decision No. KP 901/2016 and introduced Tanjung Priok as the country’s new international port hub in Indonesia.

Deep-sea Patimban Port in West Java, construction of which is being carried out jointly by an Indonesia-Japan consortium, is set to complement the future hub.

Tanjung Priok Port has long been Indonesia’s largest container port, handling more than half the country’s externally traded goods.

It received an annual 1.5 million total equivalent unit (TEU) capacity boost for imports and exports with the operation of the New Priok Container Terminal 1 ( NPCT1 ) last September, from the previous 7 million TEU capacity.

Its container traffic rose to 5.4 million TEUs last year from 5.2 million TEUs in 2015.

Of that figure, international traffic represented 3.8 million TEUs in 2016, up from 3.7 million TEUs in the previous year.

The Transportation Ministry has anticipated a 11.1 percent surge in freight traffic in the country’s ports to 929.8 million tons annually by 2020, from 836.5 million tons annually in 2015. The figure is expected to jump to 1.1 billion tons each year by 2030.

However, Port of Singapore is the one to beat as its container terminal handled 30.59 million TEUs of containers in the past year alone. The port, also dubbed the world’s busiest transshipment hub, currently accounts for almost one seventh of the world’s total container transshipment throughput.

The maritime industry also currently contributes about 7 percent to Singapore’s GDP.

Pelindo II president director Elvyn G. Masassya said the operational details would be discussed next week.

“We aim for it to be efficient, productive and competitive,” he said.

Pelindo II published data that forecast a Rp 1.5 million (US$112.59) cost-saving for transshipment from Boom Baru Port in Palembang, South Sumatra, via Tanjung Priok, and even Rp 1.6 million from Trisakti Port in Banjarmasin, South Kalimantan, compared to via Singapore.

In response to the plan, publicly listed shipping line Samudera Indonesia managing director Bani M. Mulia expressed his pessimism, citing the geographical location of Jakarta.

“As shippers we’d be happy if Jakarta could be a hub, but just be realistic. How much time deviation will containers have if they must pass through Jakarta first before going to Europe or China? It just doesn’t make sense,” he stressed.

Bani said the government should focus on increasing Tanjung Priok capacity for export and import activities as well as enhancing its efficiency amid existing problems like labor costs.