18 October 2023
Adani Ports and Special Economic Zone Ltd (APSEZ) is in talks with the Indonesian government to develop the strategically vital Sabang Port, according to a report carried online by MINT.
The group is said to be considering establishing a new container terminal and transit port facilities at Sabang, located near the Strait of Malacca, a key global trade route. The initial investment in the project is estimated at close to US$1 billion,
The development of this port would allow India easier access to the Malacca Strait, a narrow stretch of water between Indonesia and Malaysia and one of the world’s most important shipping lanes.
The strait is a vital trade route for goods and resources movement between the oil-rich West Asian nations and East Asia. China, Taiwan, Japan, and South Korea all rely heavily on the Strait of Malacca, which connects the South China Sea and, by extension, the Pacific Ocean with the Indian Ocean. Almost 80% of China’s oil imports pass through the South China Sea via the Strait of Malacca.
In 2018, Indonesia’s then-coordinating minister for maritime affairs, Luhut Pandjaitan, mooted the idea that Sabang Port could accommodate shipping vessels and submarines. Together, Indonesia and India established a task force with the aim of improving connectivity between Aceh province and the Andaman and Nicobar Islands. It has been noted that this could enhance India’s strategic position relative to China in the Indian Ocean.
For the Adani group, Indonesian projects would help expand its maritime operations. The group is also exploring developing ports in East Africa (Kenya and Tanzania), Vietnam, and the Mediterranean.
The Malacca Strait is one of the world’s busiest shipping routes. Please also see our related article on the management and expansion of Indonesia’s Belawan New Container Terminal (BNCT).
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