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Indonesia allocating $295m to build ships for maritime highway

Indonesia allocating $295m to build ships for maritime highway
President Joko Widodo's maritime highway initiative looks like it is gaining some traction with Indonesia's government earmarking IDR3.79trn ($292.5m) in the revised 2015 budget to build freight and passenger ships to serve new routes to the outer islands, local reports said.

Transportation Ministry sea transportation director general Bobby Mamahit was quoted as saying the amount has been allocated to invest in 15 freight ships and 10 passenger ships.

Bobby said that the ships would be ready for operation in two years and that the ministry would open a tender for private firms to operate them.He added that subsidies could come up to IDR15m 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.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.

Indonesian Shipbuilding Association (Iperindo) chairman Eddy 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.