SINGAPORE (REUTERS) - Singapore's port operator PSA International has joined hands with Indonesia's largest port operator and two Japanese companies to build and operate a container terminal in the Indonesian capital of Jakarta, the companies said.

Inadequate infrastructure development has for years been a major challenge for Indonesia, South-east Asia's largest economy, and this partnership hopes to benefit from the urgent need for higher container port capacity.

PSA will team up with PT Pelabuhan Indonesia II (Persero), or IPC, Mitsui & Co and Nippon Yusen Kabushiki Kaisha in its first project in Indonesia, the companies said in a statement.

They said that the terminal at Jakarta's Tanjung Priok Port, the country's largest port, would have an annual handling capacity of about 1.5 million 20ft equivalent units (TEUs).

In 2013, Tanjung Priok Port handled 6.59 million TEUs and was the world's 22nd busiest container port, according to the World Shipping Council.

The companies did not give details on the time line of the project or the size of the investment.