Indonesia told to focus on domestic seaports
Post on: 2011-09-05 By: admin
Jakarta (The Jakarta Post/ANN) - The government should focus on developing seaports to support national connectivity and improve the country's domestic logistics system, instead of building international harbors to boost regional connectivity, the Indonesian Logistics Association (ALI) says.
ALI chairman Zaldy Masita said that the government had to develop and improve seaports in all regions across the country to cut intra-island logistical costs, which currently were high due to the limited volume of transported goods between islands.
Oranges produced in Medan in North Sumatra or Pontianak in West Kalimantan, for example, can cost more than oranges imported from China because the volume of containers transported from those cities to the capital city Jakarta is lower than those from Singapore or China.
"We should improve seaport facilities in all areas throughout Indonesia, but not necessarily to operate them as international seaports," he told The Jakarta Post recently via text message.
Under a master plan on ASEAN Connectivity, Indonesia is committed to developing 14 seaports to prepare for the establishment of the ASEAN single market by 2015.
Among the ports included in the blueprint are Belawan port in North Sumatra, Dumai port in Riau, Panjang port in Lampung, Tanjung Priok port in Jakarta, Tanjung Emas port in Central Java, Tanjung Perak in East Java, Balikpapan port in East Kalimantan, Banjarmasin port in South Kalimantan, Makassar port in South Sulawesi and Sorong port in West Papua.
Zaldy said that ideally, Indonesia needed only two international seaports, one each in eastern and western parts of the country, such as in Kuala Tanjung, North Sumatra, in the western part and in Bitung, North Sulawesi, in the eastern part to serve as international hubs.
"The existence of international ports in the western and eastern edges of the country could also help balance container volumes in Java and other places outside Java," he added.
According to Zaldy, Indonesia would not gain much from the inclusion of the 14 international ports in the ASEAN Connectivity plan until a strong domestic logistics system had been established in Indonesia.
The development of the maritime-based logistics system would be the key to improve the competitiveness of domestic industry, he added.
Currently, Indonesia's logistics system depends heavily on land transportation to manage about 85 percent of total freight deliveries despite being an archipelago with more than 17,000 islands.
A poor logistics system has been one of the major bottlenecks that limit the competitiveness of locally-made products in the international market.
ALI earlier said that Indonesia's logistical costs, ranging from between 25 and 30 percent of its gross domestic product (GDP), were among the highest in the Southeast Asia region. Logistics costs in Singapore and Thailand are 10 percent and 16 percent respectively of their GDPs.
In line with that assessment, the 2010 World Bank's Logistics Performance Index (LPI) also ranked Indonesia 75th of 155 countries surveyed, behind Malaysia (29th), Thailand (35th), the Philippines (44th) and Vietnam (53rd).
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