The government will need to invest a mammoth Rp 699 trillion (US$57.40 billion) for its sea-highway program between 2015 and 2019 in support of President Joko '€œJokowi'€ Widodo'€™s maritime-axis doctrine.

National Development Planning Board (Bappenas) deputy chief for infrastructure Dedy S. Priatna said in a press conference on Friday that the investment included Rp 243.6 trillion to develop a total of 24 commercial seaports across the archipelago, Rp 198 trillion to build 1,481 non-commercial seaports and Rp 101.7 trillion to procure vessels.

Under the initiative, Dedy said the government had set a target of reducing the country'€™s logistics costs from the current 23.5 percent of GDP to 19.2 percent in 2019.

'€œThe investment will not be fully financed by the state budget. It can also be financed by state-owned enterprises and the private sector,'€ Dedy said.

Dedy said the maritime-infrastructure projects were aimed at encouraging the development of 15 industrial areas across the country, which would be developed over the next five years.

'€œThis, however, remains a draft and it may be a subject to change. Between Jan. 15 and Jan. 20 next year, the President will issue a regulation that will bind the development plan,'€ he said.

He also said that within the next three or four years, the government would designate Kuala Tanjung in North Sumatra and Bitung in North Sulawesi as the country'€™s international hubs, a plan introduced in the National Logistics Blueprint (Sislognas) of 2010-2025.

'€œThe plan to allow foreign ships to access Kuala Tanjung and Bitung will not be realized any time soon since these ports are not ready yet,'€ Dedy said.

'€œObviously it will also depend on the President, whether he will allow [foreign ships] to enter our seas or not.'€

• Investment in five-year sea highway plan to top Rp 699 trillion
• Plan includes development of 24 commercial seaports, 1,481 non-commercial seaports and vessel procurement
• 15 industrial areas will also be developed over next five years

Meanwhile, Indonesian Logistics and Forwarders Association (ALFI) head Yukki Nugrahawan Hanafi said the association fully supported the government'€™s sea-highway plan, however, he said intermodal connectivity should be the government'€™s main focus in reducing logistics costs.

'€œWe are supporting the government'€™s sea-highway concept. However, the government should not forget that land transportation currently plays the biggest role as 80 percent of transportation users use land transportation,'€ Yukki told The Jakarta Post.

Yukki also said the government'€™s plan to designate Kuala Tanjung and Bitung as the country'€™s international hubs should be carefully thought through as state-owned port operators had invested a
great deal in building ports across Java.

'€œThe government has also encouraged the private sector to construct Cilamaya Port in Karawang. Is the plan still on or not?,'€ Yukki said.

'€œI really think the government should not set such ambitious targets as there are a lot of aspects
that need to be considered,'€ he
continued.

Separately, the Indonesian Chamber of Commerce and Industry'€™s (Kadin) deputy head for logistics affairs, Carmelita Hartoto, said the problems surrounding logistics costs were not only about the lack of infrastructure, but also the seaports'€™ fees.

She said port fees accounted for more than 50 percent of shipping costs from one container yard to another.

'€œWe support the government'€™s plan to develop 24 seaports. We are ready to participate if given
the chance. But, we hope that the development of the ports won'€™t trigger further increases in fees,'€ Carmelita, who is also the chairperson of the Indonesian National Shipowners Association (INSA), said.

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