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Govt to build 25 new ships to serve pioneering routes
The government has earmarked Rp 3
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he government has earmarked Rp 3.79 trillion (US$292.5 million) to build freight and passenger ships to serve new routes aimed at facilitating the movement of goods and people outside Java and spur growth in the country's east, a high-ranking official has said.
The investment, which has been allocated in the revised 2015 State Budget, will go on 15 freight ships and 10 passenger ships, the Transportation Ministry's sea transportation director general Bobby Mamahit said.
The new ships are expected to help stabilize commodity prices outside Java, especially in the east of the country, where prices can be inflated by high logistics and distribution costs.
This initiative is part of President Joko 'Jokowi' Widodo's maritime highway initiative, which will see new routes connecting the country's east and west, with scheduled maritime traffic charging a fixed rate. Currently, shipments are clouded by uncertainties surrounding the shipping schedule, contributing to higher prices.
Bobby said that the ships would be ready for operation in two years and that the ministry would open a tender for private freightliners to operate them.
He elaborated that the subsidies could reach Rp 15 million per day to finance fuel and other operational expenses.
The additional ships are expected to reduce the voyage time to remote areas by a third, from 21 days currently to 14 days, and increase the number of new routes from the current 86 to 97 by the end of the year.
'As for the 10 passenger ships, we're building them to replace the existing ships that serve areas with high waves such as East Nusa Tenggara and Maluku. We will operate bigger ships with a capacity of 2,000 GT [gross tonnage] replacing the previous ships, which only have around 750 GT in capacity,' Bobby said.
Indonesian Logistics and Forwarders Association (ALFI) chairman Yukki Nugrahawan Hanafi lauded the ministry's plan to procure freight ships to help stabilize the prices of primary commodities in the eastern part of the country.
'The government, however, has to be fair when choosing the firms to operate the ships and allow any private company to compete for the tender,' Yukki said. 'But, overall, we are optimistic that this could help spur growth in the country's east,' he continued.
Apart from freight and passenger ships, the ministry will also build 25 new patrol ships and 10 navigation ships this year, with a total budget of Rp 2.3 trillion.
Indonesian Shipbuilding Association (Iperindo) chairman Eddy K. Logam said that the country's shipbuilding companies were ready to meet the government's need for ships this year.
'Shipbuilding is an important foundation in supporting the government's maritime axis. We hope that other governmental institutions will also help support the shipbuilding companies,' Eddy said.
Transportation Minister Ignasius Jonan previously assigned state-owned shipping firm PT Pelayaran Nasional Indonesia (Pelni) to operate scheduled sea-freight transportation as part of the government's maritime highway initiative.
Pelni president director Sulistyo Wimbo Hardjito said that the firm would begin to operate scheduled sea-freight transportation on new routes in the second quarter of this year, including to Tual in Maluku, Tobelo in North Maluku and Serui in Papua.
