Logistics And Frieght Forwarding

Luxembourg to shift cargo hub from Singapore to Indonesia’s Batam

JAKARTA (THE JAKARTA POST/ASIA NEWS NETWORK) – Indonesia and Luxembourg finalised on Tuesday (May 30) a bilateral air transport agreement that will shift the latter’s air cargo operations to Batam in Riau Islands province from neighbouring Singapore. The memorandum of understanding, which will be signed by the transport ministers from both countries on the sidelines of the Asean-European Meeting (ASEM) later this year, seeks to expedite air cargo inflows from Luxembourg to Asia, a senior foreign ministry official |revealed. Under the agreement, Luxembourg will effectively make Hang Nadim airport in Batam the hub of its air cargo operations, leaving behind Singapore’s Changi airport and its high landing fees, the ministry’s director for American and European affairs, Muhammad Anshor, said.

The government has not released any specific information about the deal, but Anshor insisted it had been discussed in detail with the transportation ministry, which is reportedly prepared to facilitate the move.

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“I don’t have the specific calculations but this cooperation initiative is sure to benefit both sides,” Anshor told The Jakarta Post on Tuesday, adding that the administrative work had already commenced. Originally developed as an alternate airport for Changi, Hang Nadim airport is waiting for a major upgrade under a massive US£448 million (S£620.5 million) infrastructure project that is expected to begin in 2019. It is expected to become one of Indonesia’s new main transportation hubs, particularly with the central government funding infrastructure upgrades for the airport with the longest runway in the country.

The air cargo agreement was finalised on Tuesday by Foreign Minister Retno LP Marsudi and her counterpart from Luxembourg, Jean Asselborn, who met in Jakarta for bilateral consultations. “We agreed to finalise the draft MoU on an air services agreement to be signed in September 2017 in Bali during the ASEM for transport ministers,” Retno said on Tuesday in a press statement after the talks. Besides air transport, both sides are also looking into prospective bilateral initiatives in digital connectivity, as well as in the finance and banking sector.

With a population of fewer than 700,000 people, Luxembourg has defied the odds by becoming the eurozone’s leading financial centre, according to the latest Global Financial Centres Index 21 published in March. “I have taken good note of the request (minister) Retno expressed to deepen our cooperation in the field of banking, finance and also investments,” Foreign Minister Asselborn said after the talks. Indonesia’s fourth-largest European investor has also committed to sending a business delegation to Indonesia later this year to explore prospective cooperation initiatives, Minister Retno said.

According to data cited by the Investment Coordinating Board (BKPM), the tiny monarchy posted US£181.9 million in realised investments from 117 projects last year, up from US£66.6 million from 37 projects in 2015.

In addition to economic cooperation, Asselborn and his delegation also made a number of political commitments, including a pledge to establish a reciprocal mechanism for supporting the other’s efforts to campaign for a non-permanent seat on the United Nations Security Council.

Luxembourg City, capital of the grand duchy, is also the seat of the European Court of Justice, the highest juridical authority in the European Union, and is also one of three official capitals of the EU together with Brussels in Belgium and Strasbourg in France.



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