After all the big talks, including two summit meetings, on infrastructure development, over the past five years, and the launching of an infrastructure reform package of 153 policy measures in early 2006, what the ministerial team found during a visit to the North Sumatra seaport of Belawan on Saturday was alarmingly discouraging.
Coordinating Economic Minister Hatta Rajasa, who led a delegation of economics ministers and business leaders, expressed profound disillusionment over what he saw as the miserable failure to execute improvement programs decided in 2006 for Belawan, the country’s third biggest seaport.
Hatta was also greatly disappointed after observing the condition of the port and its handling capacity that had not improved from that of 2006. He was not exaggerating. Hatta, as the minister of transportation in Susilo Bambang Yudhoyono’s first Cabinet (2004-2009), was more than qualified to make such an assessment. He found it hard to understand why it still took more than six days to load crude palm oil (CPO) into a 20,000-deadweight ton vessel at Belawan, the largest international seaport in North Sumatra, which is the country’s second largest producer of CPO.
Hatta’s frustration is understandable because Belawan is the largest seaport handling CPO either for export or for inter-island shipment to Surabaya and Jakarta. Until the mid-1980s, North Sumatra had been the country’s largest producer and exporter of that commodity before other major producing provinces such as Riau and Kalimantan emerged in the late 1980s.
Trade Minister Mari Elka Pangestu, one of the six economic ministers joining the team, also discovered during the visit how strikingly different were the performance reports as presented by the Belawan port management from the pervasive complaints from businesspeople about the utterly inefficient cargo handling at the port.
The painful findings by the economic ministers during the weekend visit once again show how seemingly helpless and weak the government has been in executing its infrastructure development.
If such a large and important port as Belawan has been allowed to languish in such poor condition, what we can expect from other smaller ports?
Why has the government been so ignorant in letting the state-owned port management company perform so poorly for so long without taking any reform measures?
The government took the right measure by including improvement in seaport handling in the top-priority programs for the first 100 days of Yudhoyono’s second-term government. The rationale is that gross inefficiency, corruption and uncertainty about cargo handling and arduous customs clearance procedures have caused Indonesian seaports to be classified as high-risk harbors.
Moreover, seaports play a crucial role in the country’s economy, as international trade account for more than 40 percent of its gross domestic product and more than 80 percent of this trade is done through sea transportation. In addition, as a vast archipelagic country, sea transportation plays a key role in the system of logistics in enhancing economic linkages between the various islands. That is why efficient ports are a prerequisite to developing efficient supply chains, strengthening the overall competitiveness of the economy.
But the big-bang launching in February of 24-hour, seven-day-a-week operations at the four largest seaports — Jakarta’s Tanjung Priok, Surabaya’s Tanjung Perak, Medan’s Belawan and South Sulawesi’s Makassar — seemed to be largely ceremonial without concrete action.
How can we expect to attract highly reputed investors with long-time horizons to establish production networks in Indonesia if the country cannot become a reliable part of the global supply chain due to its utterly inefficient ports?
