The Government of Indonesia is set to begin the construction of Patimban Port in Subang, West Java, next month with an investment of IDR43.2tn ($3bn).

Aimed at improving the country’s logistics sector, the port project will facilitate the transportation of goods within and across the Indonesian borders.

For the development of the port, the government has selected a consortium of five companies, including Japan’s Penta-Ocean Construction, TOA, Rinkai Nissan Construction, and Indonesia’s PT Wijaya Karya and PT Pembangunan Perumahan.

The port is scheduled to start operation early next year, with the initial commissioning of a car and ferry terminal.

Indonesia Transportation Minister Budi Karya Sumadi was quoted by straitstimes.com as saying: “We really want to increase our competitiveness and lower our logistics costs through better services.

“That’s why this is an important project.”

The port, part of Indonesian President Joko Widodo’s effort to improve the country’s infrastructure to boost connectivity, will be developed in three phases until 2027.

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“The port’s capacity will be increased to 5.5 million TEUs and 7.5 million TEUs.”

Following the completion of the first phase, the port will be able to handle 3.5 million twenty-foot equivalent units (TEUs) of containers.

Once the second and final phases are completed, the port’s capacity will be increased to 5.5 million TEUs and 7.5 million TEUs, respectively.

Indonesia has so far received JPY118.9bn ($1bn) loan from Japan, covering around 83% of the total costs of the first stage of the project.

Indonesia Japanese Embassy Economic Affairs Minister Mari Takada said: “There are many Japanese companies operating near the location.

“So the port will also facilitate their export and import.”

The Patimban Port is also expected to reduce heavy traffic at Tanjung Priok Port situated in North Jakarta, Indonesia.

The Government of Indonesia previously announced that 51% operatorship of the port will be in the hands of a local company, while foreign companies can retain the remaining stake.