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Jakarta looks to cut ship age limits

Jakarta: The government may reduce the maximum age of ships allowed for import because of safety concerns and the domestic shipyard industry's increasing ability to manufacture internationally standardized ships.

Budi Darmadi, the Industry Ministry's director general for transportation and telecommunications and informatics industries, said last week the ministry was in talks with the Trade Ministry over the plan, which will require a Trade Ministry regulation for enforcement.

"At present, imported secondhand ships with a maximum age of 25 years are still allowed in. We plan to reduce that age limit to 20 years next year and 15 years the following year," he told The Jakarta Post.

"Our first concern is safety. Second, our shipyard industry is already capable of building new ships."

Imports of secondhand ships aged up to 25 years are permissible under a 1998 presidential decree on imports of new and used commercial and fishing ships, and a 2007 Trade Ministry regulation on imports of used capital goods.

Budi said the maximum age of 15 years was determined based on "common practice" in many countries around the globe, although it might change in the future in accordance with technological developments.

He said the country's shipyard industry, unlike other industries, was relatively more resilient to the global economic crisis, and could grow by as much as 7 percent to 8 percent in output this year, a slight decline from nearly 10 percent recorded last year.

The growth of the industry is also attributable in part to the government's policy requiring all passenger ships sailing in Indonesian waters to be produced locally, and thanks to crowded manufacturers in China and South Korea that caused some buyers to divert their orders to Indonesia.

According to Budi, there are six shipyard companies planning to invest soon in the industry, while another two have realized their plans recently.

One of them is located in Belawan, North Sumatra, already in full operation since last December, with a production capacity of 50,000 dead weight tons (DWT).

The second is in Cilegon, Banten, already running but not yet at full operation, with a production capacity of 140,000 DWT.

Other companies planning to invest are one located in Batam, Riau Islands, with a planned capacity of 30,000 to 50,000 DWT; one in Lampung that has been receiving orders for 3,000-DWT ships and is planning to build a 30,000-DWT drafting dock (a pool where a ship is built); three in Lamongan, East Java, with a planned capacity of 20,000 to 30,000 DWT each; and one in Gorontalo, with a planned capacity of 10,000 DWT.

Another company, PT Mariana Bahagia, plans to spend Rp 200 billion for a 60,000-DWT shipyard at one side of the Musi River, South Sulawesi, next year.

Budi earlier said a local company specializing in passenger ships also planned to build 170-meter drafting dock.  [05/05/09]


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