DP World Returns to Surabaya With New Greenfield Terminal

L to R: DP World's Ahmed Bin Sulayem, Mohammed bin Zayed, Joko Widodo and Maspion Group head Alim Markus (DP World)

Published Jul 25, 2019 6:38 PM by The Maritime Executive

Emirati port operator DP World has signed a $1.2 billion agreement with Indonesian conglomerate Maspion Group for the development of a new three million TEU container terminal for Eastern Java. The greenfield project will be located less than ten miles from the Surabaya Container Terminal, which DP World handed over to state-owned ports firm Pelindo III in April.  

In 2017, DP World announced that the contract renewal negotiations for the two million TEU Surabaya Container Terminal had been unsuccessful. "The operating contract renewal terms offered by the Indonesian authorities did not meet our threshold for continued investment,” DP World head Sultan Ahmed Bin Sulayem said at the time. “It is unfortunate that the significant positive contributions made by global terminal operators in Indonesia have not been fully recognised, despite our successful track record."

The new agreement signed Wednesday will see DP World return to the Surabaya area by 2022, and construction on the new, larger container terminal and an adjacent industrial park will begin later this year. The terminal is the first JV of its kind in the Indonesian transportation sector involving a partnership between a private foreign investor and a private-sector Indonesian company, according to DP World.

Maspion already operates a liquid bulk jetty and terminal at Gresik through a joint venture with a Singaporean chemical company. Maspion's negotiations with DP World and its permitting applications for a container terminal complex were first reported by Indonesian media in May.

The signing ceremony for the terminal deal was part of a series of investment announcements accompanying a visit by Indonesian President Joko Widodo to the UAE. Widodo attended the ceremony, along with DP World's Bin Sulayem, Maspion Group head Alim Markus, Indonesian minister of state-owned enterprises Rini Soewarno and crown prince of Abu Dhabi Mohammed bin Zayed.

“We believe [the JV] will further consolidate the excellent relations between the UAE, the Indonesian government and Pelindo III and take DP World’s presence in the country to a new level," said Bin Sulayem in a statement.