INDONESIA SEA HIGHWAY

INDONESIA'S SEA HIGHWAY

Sea highway can also be considered as organizing maritime transportation regularly connecting hub ports from western to eastern Indonesia and vice versa using big vessels. The hub ports are supported by smaller ports which act as feeders.

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Sea highway aims to save maritime trade route and ease connectivity so it will bring great economic benefits.

Without sea highway, so far our logistic cost is very high. Currently, national logistic cost reaches 25% from gross domestic product (GDP) or twice higher than in neighboring countries.  Imagine,  20-feet   container  shipping   cost   from  Jakarta   to   Jayapura  is IDR 25 million.  Meanwhile,  similar   shipping  from    Jakarta  to   Shanghai,  China  only costs IDR 4.5 million.

With sea highway and the improvement of road infrastructures, the government targets to lower logistic cost ratio to 19.2 percent in the next five years.

Moreover, the existence of sea highway is expected to reduce economic development imbalance between the advanced western Indonesia and the disadvantaged eastern Indonesia.

According to National Development Planning Agency (Bappenas)’s data, sea highway will be supported by 24 ports comprising 5 hub ports and 19 feeder ports.

Five hub ports are Belawan/Kuala Tanjung in Medan, North Sumatra; Tanjung Priok/Kali Baru in Jakarta; Tanjung Perak in Surabaya, East Java; Makassar in South Sulawesi; and Bitung in North Sulawesi.

Meanwhile 19 feeder ports are Malahayati Port (Aceh), Batu Ampar Port (Batam), Telur Bayur Port (Padang), Jambi Port, Palembang Port, Panjang Port (Lampung), Tanjung Emas Port (Semarang), Pontianak Port, Sampit Port, Banjarmasin Port, Karingau Port (Balikpapan), Palaran Port (Samarinda), Pantoloan Port (Central Sulawesi), Kendari Port, Tenau Kupang Port, Ternate Port, Jayapura Port, Ambon Port, and Sorong Port.

In sea highway concept, big vessels will regularly sail round trip from Belawan Port in western Indonesia to Bitung Port in eastern Indonesia.

Sea highway routes are Belawan – Tanjung Priok – Tanjung Perak – Makassar – Bitung. The trip from one hub port to another takes 2 to 3 days.

Nineteen ports are the feeders for 5 hub ports. The ports of Malahayati, Teluk Bayur, Batu Ampar, and Jambi will be the feeders for Belawan Port using smaller vessels.

Meanwhile, the ports of Palembang, Panjang, Pontianak, and Tanjung Mas will be the feeders for Tanjung Priok Port. On the other hand, the ports of Sampit, Banjarmasin, Karingau, and Tanjung Mas are the feeders for Tanjung Perak Port.

Makassar hub port’s feeders are the ports of Palaran, Pantoloan, Kendari, and Tenau. Meanwhile, Bitung Port’s feeders are the ports of Ternate, Ambon, Sorong, and Jayapura.

Feeder vessels will go round trip from a feeder port to a hub port with higher frequency than now so commodity shipping will run more quickly.

Budget

To optimize sea highway’s operation, the 24 ports must be revitalized and their capacities must be improved.

According to Bappenas’ study, the total budget for land acquisition, dredging, and container terminal development of the 24 ports is IDR 243.69 trillion.

The budget will come from state budget (APBN), local budget (APBD), state-owned port enterprises, and investors. APBN budget will be distributed through Transportation Ministry. Moreover, APBN will also be disbursed in form of State Capital Injection (PMN) to state-owned port enterprise PT Pelabuhan Indonesia (Pelindo) IV. State-owned port enterprises will be responsible to the ports under their management.

In 2015-2019 National Mid-Term Development Plan (RPJMN), Transportation Ministry allocates IDR 101.13 trillion APBN budget for the next five years for maritime transportation management and operational programs.

In 2015 Revised State Budget (APBN-P), Transportation Ministry obtains IDR 20 trillion additional budget. From the number, IDR 11.93 trillion is used for sea highway development such as port development in 77 sea highway locations, port facility, Global Maritime Distress and Safety System, as well as Vessel Traffic Services.

The government also provides IDR 2 trillion PMN to Pelindo IV. Pelindo IV will use the budget to develop several ports such as Karingau, Pantoloan, Kendari, Ternate, Ambon, Sorong, and Jayapura.

The other state-owned port enterprises do not obtain PMN since they can obtain funding from internal budget or loan.

Most of the budget for the development of 24 sea highway-supporting ports will obviously come from private sector. Its financing scheme will use public-private partnership (PPP) scheme.

The budget from APBN and PMN is from the country’s capital. Therefore, its usage must be monitored so it will not be siphoned.

Connectivity

To improve connectivity and revitalize national logistic system thoroughly, sea highway must be supported by other infrastructures such as land road, river transportation, and train.

Moreover, maritime-related industries like shipping and shipyard industries must also be developed.

Therefore, the government also provides PMN to state-owned enterprises working on shipping and shipyard sectors. State-owned shipping enterprises obtaining PMN are PT ASDP of IDR 1 trillion, PT Pelni of IDR 500 billion, and PT Djakarta Lloyd of IDR 350 billion. Meanwhile,  state-owned  shipyard  enterprises  obtaining  PMN  are  PT  PAL Indonesia of IDR 1.5 trillion, PT Dok and Perkapalann Surabaya of IDR 200 billion, PT Dok dan Perkapalan Kodja Bahari of IDR 900 billion, and PT Industri Kapal Indonesia of IDR 200 billion.

With sea highway and comprehensive connectivity improvement, the government expects national logistic system will get better and logistic cost can be reduced significantly.

According to World Bank’s survey, Indonesia’s logistic performance Index (LPI) in 2014 is 3.1 placing 53rd position. Among ASEAN countries, Indonesia’s score and position is lower than Singapore, Malaysia, Thailand, and Vietnam.

Better and efficient national logistic system will boost economic growth so it can improve Indonesian people’s welfare.

Let’s support and monitor sea highway development so its benefits can be optimally used for people’s welfare.