New Domestic Ship Bookings on the Rise Due to Domestic Cabotage Policy Implementation
The bookings for domestic transportation have in fact rose significantly following the implementation of the cabotage principle policy. The policy requires that any deliveries of goods or cargo within the country must use Indonesia’s fleet. Many national shipping companies and national cruise ship operators have been able to invest funds to add to their fleets and over the last five years, national shipping companies have seen a steady increase in business. In 2004, only 15,000 GT of goods were moved, but by 2008, that number had grown to 380,000 GT.
On November 10, 2009, a lecturer from the Marine Institute of Technology in Surabaya, Saut Gurning, agreed that there have been positive changes in the industry since the controlling of domestic transportation was put solely in the hands of Indonesian transport companies.
According to him, even with some government funding, real support for the industry remains minimal. Still, Indonesia’s domestic shipping industry has already ordered many new ships, especially for domestic transport.
“The cabotage principle policy has allowed the domestic sea transport industry to dominate because now foreign companies are not allowed to compete,” he said.
In 2006, the new ship orders for domestic transport were recorded at 42,000 GT and in 2007, GT rose to 205,000. In 2009, estimates run as high as 500,000 GT based on enthusiasm among businessmen that domestic coal, oil and gas shipments will inevitably soar.
Saut Gurning explained that the government must be consistent in implementing the cabotage principle as the policy was issued mainly to protect national sovereignty.
“If consistency in government is maintained, it will encourage businessmen to invest in ships and supplies,” he said.
From 2004 to 2009, according to Saut, doubts were continually raised that the government would not carry out its commitment to the cabotage principle as licensing was not generally carried out transparently. This means it could be possible for foreign shipping companies to sneak into the domestic industry.
In addition, suspicious attempts were made by some government officials to push the date of cabotage implementation to January 1, 2011. The reasons have still not been investigated and the government is offering no clues.
(SAILINGS/BI/NT/ERIC)
