News Room - Business/Economics

Posted on 30 Oct 2015

Govt buying more ships for remote places

The government has signed contracts for the construction of 24 ships that will be used to transport people and goods to and from remote areas in a bid to improve connectivity among the country’s islands.

Upon completion, those ships will operate in 15 ports in remote areas in Indonesia, including Sintete in West Kalimantan, Tual in Maluku and Sorong in West Papua.

“As those areas can’t be developed commercially, the government needs to step in [...] With these additional ships, we can increase the frequency of the movement of goods, as well as the travel time to the remote ports, from once every two weeks to once every seven days,” Transportation Ministry’s director general for sea transportation Bobby Mamahit told the press recently.

He added those ships would also serve to boost tourism in the remote areas as they could carry goods and passengers. The 24 ships will weight 2,000 gross tons each and each will have the capacity to carry 50 tons of goods as well as 566 passengers.

The contract is estimated to be worth Rp 1.77 trillion (US$129.9 million) in total, supported by the state budget over several years until 2017.

The shipbuilding companies that won the contracts include PT Daya Radar Utama, which has been assigned to build eight ships, PT Steadfast Marine, assigned to build five ships, and PT Janata Marina Indah, which was assigned to build two.

“I hope it can be finished in around two years,” Bobby said.

The projects are part of the government’s plan to build 188 ships this year, 100 of which will be used to serve the remote areas.

The government has allocated about Rp 11.84 trillion during the three-year term for the construction of various kinds of ships, namely navigation vessels, patrol vessels and livestock ships.

As of Oct. 23, the ministry had only secured 32 contracts for the construction of 100 ships.

“More are to come, we should sign all this year. On Nov. 2, we will sign contracts for around 15 more ships,” he said, while declining to specify the types of the ships.

All 188 shipbuilding contracts will be signed by November, according to Bobby. He said that the construction of the passenger and freight ships would add to the 56 ships currently owned by the government to serve 96 routes across the country.

The ministry previously assigned state-owned shipping firm PT Pelayaran Nasional Indonesia (Pelni) to operate scheduled sea-freight transportation that serves six routes, including Tobelo in North Maluku and Serui in Papua, to support the government’s maritime program.

Bobby added that the current speed of development was also an improvement over last year’s construction of a mere eight ships.

Indonesian Shipbuilding Association (Iperindo) chairman Eddy K. Logam said that the shipbuilders welcomed the government’s ship construction program, as it would also boost the utilization of the shipbuilding capacity that currently stood at 1.2 million deadweight tonnage.