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Indonesia Plans $7.5B Ports and Logistics Overhaul with DP World

modernization of Indonesia's ports with DP World
Indonesia's invement authority wil lwork with DP World to modernize the ports (Pelindo)

Published Nov 1, 2021 6:16 PM by The Maritime Executive

Indonesia has secured a massive global investment agreement designed to enhance the country’s maritime and port sector. Historically Indonesia has trailed neighboring countries in containerization rate and currently is facing issues of high logistics costs which it hopes to solve through a new agreement between its sovereign investment authority and Dubai’s DP World.

DP World and the Indonesia Investment Authority (INA) signed a strategic alliance agreement to explore investments into the logistics infrastructure in Indonesia. The wide-reaching agreement includes hinterland investments, inland terminals, cargo parks, feeder network systems, landside transport, and industrial zones. They will also explore collaboration with the Indonesia Port Corporations (Pelindo). According to INA, the economic value of the partnership could reach up to $7.5 billion over the long term.

Indonesia is the largest archipelago in the world with more than 17,000 islands. The goal of the agreement with DP World is to bring world-class technology and best practices to develop new port terminals and assets, enabling greater shipping efficiency and enhancing inter-island and international connectivity.

“Indonesia’s maritime and port sector is key to support trade and consumption across the archipelago, and this collaboration with DP World will enable us to resolve issues of high logistics costs and port inefficiencies,” said INA’s Chief Executive Officer, Ridha Wirakusumah.

DP World Group Chairman and CEO H. E. Sultan Ahmed Bin Sulayem said, “DP World recognizes the vast potential of Indonesia as one of the fastest-growing economies in the world, as well as projects undertaken by the government to improve port facilities. Through our partnership with INA, we are committed to supporting national initiatives that create value and bring in expertise to modernize the Indonesian maritime infrastructure.”

DP World will seek to leverage its joint investment platform with Caisse de dépôt et placement du Québec, which it launched in 2016. Over the past five years, the fund has invested in 12 port terminals globally.