National

Government Prioritizes National Shipping Companies
Monday, 11 July, 2005 | 21:05 WIB

TEMPO Interactive, Jakarta:The Indonesian government will no longer invite foreign shipping companies to bid for the transportation of five commodities: cargo, wood, fertilizer, cement and rice.

According to Minister of Transportation Hatta Radjasa, this measure has been taken in line with the implementation of Presidential Instruction No. 5/2005 on the Empowerment of the National Shipping Industry.

“Even if the foreign companies participate, they will be disqualified,” Radjasa said at the end of last week.

The presidential instruction has determined a total of 13 commodities that have to be transported by national shipping companies until 2009.

In addition to the above mentioned five, other commodities include oil, palm oil, fresh products, mining goods, liquid goods, agricultural products, coal and other mining products.

According to Radjasa, commodities that must be transported by national ships have to be increased to at least nine commodities.

Meanwhile, all these commodities must be transported using national shipping companies.

“Except for those restricted by long-term agreement, such as oil, gas and coal,” said Radjasa.

This fixing of this period, said Radjasa, has been adjusted to meet the capacity of Indonesian National Ship Owners Association (INSA).

This policy will be implemented if it is followed by an increase in ship space capacity.

As reported earlier, several months ago national shipping businessmen complained about the sinking of their industry.

Radjasa explained that in addition to initiating the development of the national shipping industry, the issuing of the presidential instruction was aimed at increasing international market share.

“Currently, our market share is only four percent,” stated Radjasa.

He added that the government had also been preparing several incentives for national shipping companies, including taxation related ones.

However, Radjasa is not yet prepared to detail incentives that will be given.

Separately, INSA chairman Oentoro Suryo has asked that the banking sector not hesitate provide financing for the national shipping industry because last Friday, Indonesian President Susilo Bambang Yudhoyono ratified the Mortgage Law.

“So, we already have a clear legal base for the procurement of ships,” said Suryo.

He said he also expected that funding to procure ships should not only come from the banking sector but also from finance and leasing agencies. (Khairunnisa-Tempo News Room)