The Indonesian Ministry of Transportation has announced that two major National Strategic Projects (PSN) aimed at enhancing logistics in Sumatra will not be completed this year due to land acquisition issues.
The two delayed projects are the new Palembang Port in Tanjung Carat, Banyuasin Regency, which started construction in 2021, and the Muaro Jambi Container Terminal on the Batanghari River.
“The transfer of land from the local government to the Ministry of Transportation is still in progress, and permits are still being processed, making it impossible to finish these projects this year,” Adita Irawati, spokesperson for the Ministry of Transportation, said as by Katadata.co.id.
Initially, Transportation Minister Budi Karya Sumadi set a target to complete the construction of the new Palembang Port by 2023. This delay means the PSN, conducted under a Public-Private Partnership (PPP) scheme, will be postponed by at least one year.
Similarly, the construction of the Muaro Jambi Container Terminal is being carried out under a PPP scheme with PT. Wahyu Samudra Indah (WSI). WSI has invested Rp702.2 billion (US$44 million) to develop the terminal’s dock, support facilities, and equipment.
In return, WSI has been granted a 66-year concession with a 5 percent annual return on investment from the terminal’s gross revenue. Once the concession period ends, the terminal will revert to government ownership.
Minister Budi highlighted that under President Joko Widodo’s administration, there are a total of 35 transportation-related PSN projects. These include 15 maritime projects, 13 railway projects, and seven aviation projects. Of these, 25 have been completed, while the remaining projects are, on average, 82 percent complete.
According to the Coordinating Ministry for Economic Affairs, 96 PSN projects are likely to continue into the next administration. This includes 16 new PSNs approved this year and 80 from previous years scheduled for completion post-2024.
Acting Deputy for Regional Development and Spatial Planning at the Coordinating Ministry for the Economy, Susiwijono Moegiarso, said that most of the 16 newly approved PSNs have already entered the groundbreaking phase. However, the number of PSNs continuing to the next administration is subject to change.
“We will evaluate and review which PSNs meet our criteria. If they do not meet the criteria, we will remove them from the PSN list,” Susiwijono said.
The delays highlight the challenges of land acquisition and regulatory approvals in large-scale infrastructure projects, impacting timelines and the overall progress of strategic national initiatives.
