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INDONESIA
has made remarkable progress in setting
the framework for further development of
its ports after the promulgation of the
2008 Shipping Law.
As
the world's largest archipelago, this ASEAN
member country is projected to double its
GDP by 2020, increasing from US$900 billion
in 2012 to $1.9 trillion by 2020, according
to a Port Strategy report.
Additionally,
Indonesian container freight volumes are
forecast to "at least double"
from 2012 to 2020.
With
the country slated to be the sixth biggest
economy in the world by 2030, this is indeed
the time to iron out the sometimes discernibly
chaotic trade facilitation arrangements
that Indonesia has typically been associated
with.
So
far, Indonesia's five key ports - Tanjung
Priok (Jakarta), Tanjung Perak (Surabaya),
Belawan, Tanjung Emas and Panjung - account
for more than 90 per cent of the country's
container trade. Therefore, the construction
of new container port terminals is vital
for Indonesia to handle further freight
increase in near future.
Rajiv
Biswas, Asia-Pacific chief economist for
IHS Global Insight, was cited by Port Strategy
as saying: " [The current] congestion
reflects a number of factors, including
demand drivers, notably Indonesia's sustained
rapid growth in GDP and trade flows since
2004."
He
urged the Indonesian to pay much attention
in port planning and operations. He said
although the abovementioned five ports "are
a key strategic priority for government
initiatives for port development, the Indonesian
government will also have a much larger
task of upgrading its wide network of other
ports, which are crucial for intra-island
trade."
Besides,
he suggested that the Indonesian government
should encourage more private investment.
"Although
the Indonesian government has already been
involving international shipping lines and
global port operators in some of its largest
ports, considerable further private sector
participation will accelerate the development
of Indonesian ports. Such reforms will help
to encourage greater efficiency and improved
port management, as well as greater private
financing for port infrastructure development.
An estimated $20 billion needs to be spent
on Indonesian port infrastructure by 2020,"
said Mr Biswas.
Indeed,
a timetable of 2014 has been set for the
implementation of a single port authority.
But as is in the glacial nature in Indonesia
whenever rules are mooted and plans suggested
there is always a big "if" as
to how these plans pan out.
If
and when that eventuality does happen the
move will almost surely be welcomed with
undisguised relief. As after all, competing
and sometimes annoyingly overlapping directives
have hardly done Jakarta any favours.
There
is no disputing, whatsoever, the determination
with which Jakarta wants to make a break
with the "past" when port authorities
in the country typified by Pelindo I to
IV were but disparate entities, fragmented
loosely and which had all the appearance
of a lack of an authoritative coordinating
voice to govern port activities and port
development.
A
typical case in point is the ceaseless congestion
and recurring bottle necks in Tanjung Priok.
For
years shippers have complained of the lack
of draft, berthing, storage and space, whenever
vessels call.
Sources
say ships take up to six days to get into
ports and spend an equal time unloading
cargo. Trucks can be held up for hours on
end sometimes resulting in frustrated shippers
eventually taking their cargo to Singapore
or Malaysia.
Even
the IMF has urged Indonesia to accord utmost
priority to infrastructure development.
Another
is the Environment Impact Audit or EIA which
is ruled as mandatory for port development
across the world. Very little is known of
how rigourously this is enforced in Indonesia.
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