ICTSI bags 30-year deal to operate port in Indonesia

MANILA, Philippines — Port tycoon Enrique Razon Jr. has taken another step to expand business presence in Indonesia, this time bagging a 30-year contract to operate a flagship terminal in Batam Island.

Razon-led International Container Terminal Services Inc. (ICTSI) has entered into an agreement with PT Batam Terminal Petikamas (BTP) for the operations and maintenance of the Batu Ampar Container Terminal (BACT).

BTP signed the deal with PT Batu Ampar Container Terminal, which is 75 percent controlled by ICTSI and 25 percent owned by PT Interport Sarana Infrastruktur Indonesia.

The agreement covers a 30-year concession to manage BACT. The facility is located close to the Malacca Strait, one of the world’s most important trade routes.

The terminal spans 1,032 meters in quay length, with five ship-to-shore cranes in its possession. The BACT is equipped with a fully developed back-up area that can support additional capacity. 

The BACT can handle a container traffic of more than 600,000 twenty-foot equivalent units, and its second segment of development will raise its capacity to as high as 2.1 million TEUs.

For ICTSI, this marks another step toward improving its Southeast Asian presence, particularly in Indonesia, where it is already present through the East Java Multipurpose Terminal (EJMT).

In 2022, ICTSI bought a majority stake in EJMT’s operator PT East Java Development for $46.5 million to mark its entry into Indonesian territory. 

This time, ICTSI is betting on the potential of a terminal that is under Indonesian jurisdiction, but is closer to Singapore than to Jakarta. The BACT is situated at the mouth of the Malacca Strait, where 30 percent of global maritime traffic passes through annually. 

The Malacca Strait connects the Pacific and Indian Oceans, making it a crucial thoroughfare for vessels traveling the east and west of the world. As such, the BACT is positioned to become an important port for transshipment. 

ICTSI’s partner PT Interport Sarana Infrastruktur Indonesia is a subsidiary of PT Indika Energy TBK, which is an Indonesian conglomerate engaged in energy, infrastructure, logistics and minerals, among others.