• International Journal of Technology (IJTech)
  • Vol 11, No 2 (2020)

Sustainability Assessment of the Tanjung Priok Port Cluster

Armand Omar Moeis, Fenny Desriani, Arry Rahmawan Destyanto, Teuku Yuri Zagloel, Akhmad Hidayatno, Aziiz Sutrisno

Corresponding email: armand.omar@ui.ac.id


Cite this article as:
Moeis, A.O., Desriani, F., Destyanto, A.R., Zagloel, T.Y., Hidayatno, A., Sutrisno, A., 2020. Sustainability Assessment of the Tanjung Priok Port Cluster. International Journal of Technology. Volume 11(2), pp. 353-363

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Armand Omar Moeis Department of Industrial Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia
Fenny Desriani Department of Industrial Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia
Arry Rahmawan Destyanto Faculty of Technology, Policy, and Management, Delft University of Technology, 2626BX Delft, the Netherlands
Teuku Yuri Zagloel Department of Industrial Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia
Akhmad Hidayatno Department of Industrial Engineering, Faculty of Engineering, Universitas Indonesia, Kampus UI Depok, Depok 16424, Indonesia
Aziiz Sutrisno School of Innovation Sciences, Eindhoven University of Technology, 5600 MB Eindhoven, the Netherlands
Email to Corresponding Author

Abstract
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A seaport attracts firms to it; such firms are often complementary and find ways to interact with one another, forming port clusters. The growth and decline of these clusters largely depend on government policies. Large port clusters have more economic activity but are also characterized by negative externalities, such as air pollution. This study investigates the dynamics and sustainability of the Tanjung Priok port cluster. System dynamics are used to examine the issue, and port cluster sustainability is assessed by modeling the dynamics of the system over a 20-year timespan. The growth of a port cluster has been found to positively influence the regional economy and the level of employment while also damaging the environment. This study investigates further the impact of an alternative port cluster development program (namely a free trade policy) and shore power system (SPS) program policies on the sustainability of a port cluster. The model indicates that when a free trade policy and an SPS program are implemented in tandem to maximize the economy and reduce environmental damage, they provide additional benefits.

Economy of port city; Port cluster; Sustainable port; Shore power system; System dynamics

Introduction

The largest port in Indonesia for cargo traffic is Tanjung Priok, and its trend of growth is upward, especially for container cargo. This port has attracted many firms to locate near it. The government of Indonesia provides a special area as an option for these firms to do business, called the Nusantara Bonded Zone (Kawasan Berikat Nusantara/KBN, Jakarta, Indonesia). According to KBN, the state-owned enterprises that together administer the zone, it is “a certain territory within the customs area of Indonesia which has incentives specifically [for] the suspension of import duties and other state levies” (KBN Persero, 2016). Together, these firms form a so-called port cluster. De Langen (2003) defined a cluster as “a population of geographically concentrated and mutually related business units, associations and public (or private) organizations centered around a distinctive economic specialization” (p. 10). Clusters that form around seaports and are made up of firms that engage in port-related activities are called port clusters (Haezendonck, 2001).

The  firms  in  a  port  cluster  contribute  to  the  economy  by  giving  wages  to  their employees and paying their due taxes. Furthermore, when many firms establish plants and offices close to a seaport, besides bringing more jobs, they also contribute by increasing port throughput. These contributions are dependent on the fact that a port is a cluster of economic activities (de Langen and Haezendonck, 2012) through which a varied range of products is shipped. However, besides benefitting the economy, a port cluster also causes environmental damage because the number of firms in a port cluster increases and the use of port equipment intensifies the need for both land and marine vehicles. The associated fuel combustion contributes to emissions of carbon dioxide (CO2) and sulfur dioxide (SOx) that reduce air quality around the seaport. These air pollutants affect public health.

We could establish behavioral possibilities and progressive variable effects if we consider a port cluster as a complex system consisting of many interrelated actors, the understanding of which would involve many disciplines, such as those focusing on ports, economics, trade, and the environment (Grösser, 2017). In this regard, a more holistic view is needed to provide a better understanding of the underlying structure and causal relationships between the elements influencing port cluster development. Such a holistic view would provide better insights for policymakers to assess the impact of the Tanjung Priok port cluster in terms of its economic and environmental performance as well as its sustainability. Nevertheless, research addressing this issue is insufficient.

This study aims to investigate the dynamics and sustainability of the Tanjung Priok port cluster as the basis for assessing the feasibility of existing policies in improving the sustainability of this port cluster. This study uses the system dynamics approach (Sterman, 2000; Hidayatno et al., 2015; Yuliawati et al., 2015) incorporated with the policy analysis framework (Thissen and Walker, 2013) to model a port cluster system and analyze how it affects the economy, society, and the environment. For this purpose, two policies will be examined, namely the port cluster development program (free trade zone policy) and the shore power system (SPS). These two policies are chosen for their effectiveness in accelerating economic growth and significantly reducing air pollution. In doing so, this study enriches the literature in maritime logistics and sustainable development in a broader sense. In practice, this research sets the stage for the application of a sustainability assessment framework of a port cluster.


Conclusion

We can conclude that by applying simple and straightforward programs such as the SPS, the government/port regulator and other stakeholders could be benefited in two ways. First, the establishment of the SPS will mitigate the current emission level. Second, even if port activities are expanded (through the implementation of a free trade zone policy), thus increasing emission levels, the implementation of this policy combined with the SPS will allow the port to increase economic activities while managing emission levels.

Acknowledgement

    The research was funded by Universitas Indonesia under the Tugas Akhir Doktor (TADOK) research grant (TADOK/122/FT/2018).

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