Private sector involvement in port management in Indonesia: the case of Cikarang Dry Port

In the global economy, logistics cycles and international trade have become important driving forces for many countries to improve their economies and competitiveness. This has necessary led to the development and improvement of logistics and port management. Considering many problems in port management, the Indonesian government has focused on the development of infrastructure in the port area. The policy of the National Logistics System (SISLOGNAS) aims to realize national connectivity that is self-reliant, competitive and sovereign of the nation. One of the derivative policies of SISLOGNAS is the Integrated Customs Service Zone (KPPT) scheme. Based on interviews, documents review, survey responses and personal observation, this paper finds that several factors such as the poor Logistics Performance Index, high logistics cost, long dwelling time and logistics security has prompted the government to design a logistics policy. The Public Private Partnership with PT Cikarang Inland Port gives the possibility to develop the Cikarang Dry Port based on the KPPT concept, despite the financial limitations of the government. The private port operator company had some issues with contributing to the project, like un-optimized capacity utilization, the complexity of marketing strategies and government inconsistencies in policy implementation. But eventually the government and PT CIP both showed their intentions in continuing the partnership to be maximized. It seems that this partnership has not produced yet all the expected results for both parties. The private partner still finds difficulty to get the return of investments on the CDP development. Some of the policy objectives that have been estimated are not achieved yet. There is still a lot of work that should be done by this partnership to further optimize the efficiency of CDP utilization such as the improvement of security systems, the cheaper logistics handling costs, and closer service area to users.