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View all search resultsINSA, economist slam unfair competition in flagship Tol Laut program
An industry association and a maritime economist have called for a review of the subsidized "Tol Laut" program at a government-sponsored webinar, citing market disruption and unfair competition.
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T
he Indonesian National Shipowners Association (INSA) and an industry expert have called on the government to reevaluate the subsidized "Tol Laut" (maritime highway) program to avoid market disruption and unfair business practices.
The maritime highway, launched in 2015, is a subsidized shipping program for distributing basic and major consumer goods, as well as steel and cement, to remote regions of the archipelago.
Transportation Minister Budi Karya Sumadi said that the maritime highway program aimed to reduce price disparities across the country, especially in eastern Indonesia, generally due to shipping and logistics costs.
“We are planning to transform the Seba seaport in Kupang into the logistics hub for [East Nusa Tenggara],” Budi said on Aug. 24 during a webinar the ministry held in collaboration with Detik.com.
Despite the minister’s optimism, INSA chair Carmelita Hartoto criticized the program during the webinar that it was undermining fair competition for private shipping companies.
“Private shipping lines are currently experiencing unfair competition because the Tol Laut program is being used to ship nonessential goods [at much lower prices],” she said.
Carmelita has called on the government to comply with Presidential Regulation (Perpres) No. 70/2017 on the public service obligation (PSO) of shipping freight in outlying regions, which revised Perpres No.106/2015 on the PSO of shipping companies under the maritime highway program.
