Trasportation News

DUBLIN, Indonesia Today - Business Monitor International projects that Indonesia's freight demand to remain resilient, with the demand dependent on the performance of the Indonesian economy in 2012. 

BMI remains relatively bullish on this point, believing that the economy is resilient enough to resist increasing global economic headwinds.

BMI now forecasts 2012 GDP growth in Indonesia of 5.8% (following the 6.3% expansion experienced in 2011). It's outlook for 2013 is for growth to accelerate again to 6.2%.

In the five years to 2016, BMI expects growth to average 6.2% a year, confirming the country as a regional outperformer.

"Industry-specific factors also remain broadly positive. Investment interest in modernising the country's port, road and rail infrastructure is gathering strength. If the government can reduce red tape and political risk, a series of major projects may go ahead over the next couple of years," BMI said.

BMI forecasts air freight volumes to grow by 6.6% in 2012, with average annual growth of 6.3% during BMI's forecast period to 2016, rail freight volumes are estimated to rise by 1.2% in 2012, with average growth of 1.4%, Tanjung Priok total tonnage growth forecast for 2012 is 5.1% to 44.337mn tonnes, with average growth of 5.2%, and Tanjung Priok container growth forecast is +9.4% to 5.173mn twenty-foot equivalent units, with average growth of 8.9%.

BMI expects the total value of Indonesian trade to grow by 9.0% in real terms in 2012, up marginally from 8.9% in 2011.

State-owned Russian Railways continues to pursue a US$2.5bn freight rail project in Indonesia, designed to carry coal for export. The 300km railway line would connect the provinces of Central Kalimantan and East Kalimantan, reaching to Balikpapan port, from where the coal would be shipped to export markets. Completion of the project would allow coal production in Central Kalimantan to be boosted from 5.0mn tonnes per annum to 30.0mn tonnes.

Chinese investment may be the answer to Indonesia's particular situation: encouraging export and manufacturing growth prospects, poor infrastructure, high logistics costs, and inadequate port capacity - a classic bottleneck. China Investment Corporation (CIC), an investment arm of China's sovereign wealth fund, may invest up to US$25bn in Indonesia's mining and infrastructure industries. BMI believes this investment by China highlights a trend set other countries, whereby China secures access to national resources through investing in a country's infrastructure.

Five major groups have been lined up for a US$1.37bn expansion project at the Port of JAKARTA, also known as Tanjung Priok. The project, which will boost the handling capacity of the port by 1.8mn containers, is expected to begin construction before the end of 2011 and be completed by 2015. Among the various consortia competing for the job are big international groups such as Hutchison, Mistui, Evergreen, and the Port of SINGAPORE Authority. (Theindonesiatoday.com)