International Container Terminal Services Inc., the world’s largest independent port operator, said Tuesday it mutually agreed with PT Pelabuhan Indonesia IV, or Pelindo IV, not to extend a 2006 contract for the operation of a port in South Suluwesi.
The agreement covers the procurement, installation, and operation of a container loading and unloading facility at the Makassar Port Container Terminal in Indonesia by ICTSI’s 95 percent-owned Makassar Terminal Services, or MTS. The deal was supposed to expire on Sept. 30, 2013 but was extended to January 30, 2023.
Under the agreement, MTS provided cargo handling equipment at the Port of Makassar in exchange for 60 percent of the gross revenue based on the published tariff for the operation of cargo handling equipment owned by MTS.
“The parties have mutually agreed not to renew the CA (cooperation agreement),” ICTSI told the Philippine Stock Exchange. Elsewhere in Indonesia, ICTSI has port operations in East Java and Jakarta.
The port operator did not elaborate on the decision to end the agreement with Pelindo IV, although it repeatedly mentioned in various company reports in the past that ICTSI has assessed the financial impact of a non-renewal.
According to a report published late last year by Indonesia’s Journal of Economics, Management, Entrepreneur, and Business: “The main problem of Makassar Port is the capacity of wharf and terminal container yard Hatta which has been almost in the optimal condition due to the limited port land which is in the center of Makassar City and has not been integrated with the transportation modes in the port area.
As a result, PT Makassar Terminal Services, one of three operating subsidiaries in Indonesia, “will immediately cease operations at the Makassar Container Terminal,” ICTSI said.
