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Jokowi's sea toll subsidized shipping programme kicks off with three ships

Jokowi's sea toll subsidized shipping programme kicks off with three ships
Indonesia has allocated IDR27bn ($1.9m) for the so-called "Sea Toll Road" which forms part of President Joko Widodo's maritime ambitions in boosting the economy by improving connectivity between its islands, local reports said.

The subsidized shipping programme will involve the operation of three 115-teu ships until December. State shipping company has been chosen to take charge of shipping services for the programme.

Pelni's Caraka Jaya Niaga 111-32 cargo vessel will handle shipments from East Java's Tanjung Perak port to Tual in Maluku as well as Fakfak, Kaimana and Timika in Papua.

The Caraka Jaya 111-22 will ply from Jakarta's Tanjung Priok port to Biak, Serui and Nabire in Papua, and Wasior and Manokwari in West Papua.

The third vessel, Ceraka Jaya 111-4, will service the route from Tanjung Priok to Kijang and Natuna, Riau Islands.

The programme is expected to lower the price gap between the more developed western part of Indonesia and its struggling eastern regions by 30%, according to Trade Minister Thomas Lembong.

Costing IDR8m per shipment, the Sea Toll Road programme is a cheaper alternative to current routes, which charge IDR48m per shipment, Thomas said.

“The schedule will be fixed, whether there are goods to be delivered or not. Based on our study, the high prices in the remote areas are usually caused by uncertainty surrounding shipping schedules and sea conditions. The cargo ships can hopefully help to reduce the disparity between the eastern and western part [of the country],” Transportation Minister Ignasius Jonan said.

He added the areas served by the subsidized cargo ships was just the first stage of the plan. The government previously said that there would also be routes to Merauke, Papua, Rote, East Nusa Tenggara and Tobelo, North Maluku, among others.

The transportation ministry has committed to disbursing IDR257.9trn next year to help PT Pelni operate six routes in total.

“I hope Pelni can have more ships in January or December,” he said, adding that the subsidized freight services would be granted only to areas that were not served by private ships.

The cargo ships are slated to carry staple goods such as rice, sugar, flour, cooking oil, eggs, steel and cement.