Shipbuilders Expecting Govt's Sustainable Programs in Vessel Procurement

Damas Jati - Jakarta, 08/05/2018, 10:32


Government is expected more seriously help the national shipbuilding industry and to facilitate this one of the nation's potential industry to overcome the obstacles faced by the industry for a very long time.

Some contacted indsutry players affirmed to Indonesia Shipping Gazette of some government programs that directly created positive impact to the  industry, including procurement  of as many as 100 fleets for sea toll program in 2015.

"Thanks to this program and the government trust to appoint national shipbuilders to build those  vessels," Amir Gunawan,  President Director of Daya Radar Utama (DRU), one of the country's leading shipbuilders, said.

But, Amir expects for this program continuity. In addition to creating more works and market for national shipbuilders, the program continuity will create a good  business climate and investment certainty.

"Shipbulding is both labour intensive and high capital investment. So, business sustainability is a must," Amir noted.

"For example, building a graving dock is equivalent with building a five-star hotel. But, if it does not build or repair vessel, how can the capital will return. If there is no job how can we guarantee the future of the employees,"  he said.

"In DRU, we have to guarantee the future life of as many as 4,000 employees," he  said.

In line with its maritime vision and mission as well as the sea toll program, the government - through Ministry of Transportation - earlier planned to procure as many as 300 vessels. But, then the Ministry cut the numbers to only 100. The 100 vessels have been built by the national shipbuilders based on the 2015 budget. But, until 2017, no more procurement program was released.

"National shipbuilders appreciate this. But as I said above, we (national shipbuilders) expect for program contuinity, thus giving good business climate and investment certainty," he said.


Amir also expects the government to facilitate the national shipbuilders to get progress and to come out from old problems and obstacles faced by national shipbuilder.

Amir affirmed some issues faced by national shipbuilders, including the problem of high cost investment, poor access to funding sources (higher credit rate from banks), local content and import duty of components, the increasing price of land rent, and so on.

"We expect the government to facilitate us to solve those issues and problems," Amir said.

Amir noted that most of the problems cannot be self-solved by the shipbuilders. Government good will and positive intervention are needed.

"For example the policy for zero import duty for components. It needs government good will and intervention, so do other fiscal policies like tax cut or tax holidays. We absolutely need government support," he said.

Another issue that also calls for government facilitation is relating to land rent framework. Amir explained that most of national shipbuilders are built on the state owned PT Pelindo area. The shipbuilders have to pay rental cost under yearly contract.

"What we expect is the government can facilitate in setting up a more competitive rental tariff and in setting up a longer contract framework. The existing yearly contract is not good for our business. We expect for a longer term of contract, thus it can guarantee our business," he said.

According to Indonesia Shipping Gazette database, some shipyards around Tanjung Priok have to pay around Rp240,000/m/year for rental land to Pelindo II.

Some contacted sources said the price was too expensive, calling for price decrease and a term contract of longer than just a year.

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