DP World will begin operations at Indonesia’s Belawan New Container Terminal (BNCT), after finalising an agreement with the Indonesia Investment Authority and state-owned port operator Pelindo to manage the terminal and expand its capacity.
The tripartite partnership will establish Indonesia’s most direct link with the Malacca Strait, one of the world’s busiest shipping routes, the Dubai-based port operator said on Friday.
In the longer term, the agreement aims to increase BNCT’s capacity to 1.4 million twenty-foot containers (TEUs), up from 600,000 TEUs at present, DP World said.
BNCT will also aim to attract more direct calls, reducing North Sumatra’s reliance on regional hub ports to access regional and global markets.
“We are proud to help Indonesia expand the Belawan New Container Terminal and support its ambitions to develop the economy of Sumatra through infrastructure," said Sultan Bin Sulayem, group chairman and chief executive of DP World.
"By investing in cutting-edge sustainable technologies, world-class training and the highest standards of health and safety, we aim to eliminate inefficiency and enable the flow of trade between Indonesia and the world.”
The UAE in 2021 invested $10 billion with the Indonesia Investment Authority, the country’s sovereign wealth fund.
The funds will be used in strategic sectors such as road and port infrastructure, tourism and agriculture, as well as other promising industries that can contribute to Indonesia’s economic growth and social progress.
The BNCT currently serves as a local hub for neighbouring provinces in Sumatra. The expansion and modernisation programme will strengthen its position as a major trade and logistics gateway in the Malacca Strait, DP World said.
Besides modernising maritime infrastructure, DP World will also work with its partners to connect other terminals and small ports on the Island of Sumatra to further develop the BNCT’s role in reducing container logistics costs within Northern Sumatra.
“As directed by President Joko Widodo, there is always strategic value for equity and acceleration of economic growth in the regions and nationally through port development, including this new container terminal at the Port of Belawan which is believed to support downstream to maximise exports in new ways and also accelerate the economy in North Sumatra which continues to grow," Indonesia's minister of state-owned enterprises, Erick Thohir, said.