Jakarta,
July 7, 2015 (Antara) - The government is now turning to domestic
shipbuilding industries to meet the demands for various kinds of ships
needed to support its sea toll road development program.
In line with the Joko "Jokowi" Widodo administration's vision
of transforming Indonesia into a global maritime axis, a crucial step
toward this idea is enhancing inter-island connectivity and increasing
the number of ships to serve the Indonesian archipelago, which comprises
more than 17 thousand islands.
Indonesia has 250 shipbuilding industries, including over 100
shipbuilding industries in Batam that are able to produce large-scale
ships with a capacity of 17,500 deadweight tonnage, the same as those of
cargo ships, tankers, and commercial vessels.
President Jokowi in June 2015 visited Batam to see shipbuilding
industries and found out that domestic industries are able to build
ships.
The head of state said he would ban import of ships because shipbuilding industry in the country is already capable of producing them.
"Orders abroad will no longer be allowed. Why should we order abroad
while we are already able to build them," he said during a dialog with
shipbuilding industrialists at PT Anggrek Hitam shipyard in Batam, Riau
Islands.
He urged related parties to support the development of the nation's
shipbuilding industry by placing orders with them and supporting
investors.
Local contents in the domestic product were still around 40 percent but he believed in stages they would increase.
He said that he was impressed when he visited South Korea and saw shipyards there which he viewed to be very advanced.
However, after visiting Batam shipyards, the President was convinced
that industries at home were already able to build different types of
ships to meet the need at home.
"In Batam there are 104 shipbuilding industries. After returning from
here I will gather officials from state-owned companies, the ministry of
defense, the ministry of transportation, the ministry of fisheries and
marine resources, state-owned oil company PT Pertamina, gas company PN
Gas and (order them) to no longer order ships from abroad," he said.
Moreover, Jokowi has also urged investors to assist with the
development of the national shipbuilding sector so they can meet both
local and foreign demands.
"I want our industries to cooperate with investors so they can produce
vessels not only for the domestic market but for the export market, as
well," he remarked.
According to Jokowi, the government wants the industry to be well
developed to achieve its maritime axis goal for Indonesia.
Furthermore, the National Investment Coordinating Board (BKPM) has
lauded the government's policy to procure ships from domestic
shipbuilding industries to enable them to boost their utility and
directly absorb a considerable number of workers.
The current utility of the shipbuilding industry is around 40 percent,
and the industry now employs some 60,000 people, Head of the BKPM Franky
Sibarani said in a statement here on Tuesday.
"According to a rough calculation, every investment worth US$1 million
can create new direct employment opportunities for 75 workers and
indirect employment opportunities for 300 others. Currently, we are
guarding interests to invest some US$9.3 billion in the shipbuilding
sector, which has the potential to absorb 700 thousand workers
directly," he explained.
The nation needs more than one thousand ships within the next five years, he added.
As many as 619 ships are needed to support the government's sea toll
program, and the Transportation Ministry is estimated to procure 365
ships, including pioneer ships, patrol ships, and ships for navigation
and inspection.
"These do not include demands from the sectors of oil and gas, fisheries, etc.," he noted.
Moreover, in the long term, the national shipbuilding industry is
expected to help increase the country's exports, Sibarani pointed out.
Indonesia's potential to become a major player in the global
shipbuilding industry is considerable, given that the country's market
share is only 0.3 percent as compared to the 2.6 percent share of the
Philippines and 1.1 percent share of Vietnam, the BKPM head stated.
According to Sibarani, the Indonesian shipbuilding industry faces a
number of issues related to financial aid from banks, fiscal incentives,
and licensing.
In addition, the investment coordinating board is planning to develop a
licensing integration mechanism in shipyard regions such as Lamongan in
East Java province and Tanggamus in Lampung province, he affirmed.
The government's policy has also been lauded by the Study Center of Public Policy (Puskepi).
However, the Puskepi said the policy needs to be backed up with a presidential regulation.
In addition, the regulation should not only be limited to state
companies but the regulation should also be applied to other
state agencies, Puskepi director Sofyano Zakaria said recently.
The policy of President Jokowi deserves support from all as it
concerns the interest of the national shipbuilding industry,
Sofyano said.
In addition, the government needs to provide incentives for investment
in shipbuilding industry to improve the competitiveness of the
industry, he said.
The incentives could be a cut or exemption of import duties on materials needed for the industry, he said.
In the meantime, the Ministry of Fisheries and Marine Resources will
allocate some Rp6 trillion to build a number of ships to boost the
performance of the fisheries and marine resources sector.
"There is national consensus on this subject. Budget spending is aimed at developing national ships," Minister of Fisheries and Marine Resources Susi Pudjiastuti said recently.
"There is national consensus on this subject. Budget spending is aimed at developing national ships," Minister of Fisheries and Marine Resources Susi Pudjiastuti said recently.
She added that in 2016, Rp6 trillion will be allocated mostly to build fishing
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