Ministry agrees to build five navigation ships

February 23, 2016,

The government is working to upgrade the country’s maritime navigation system by developing several navigation vessels as part of President Joko “Jokowi” Widodo’s plan to strengthen the country’s maritime transportation.

On Monday, the Transportation Ministry signed an agreement with shipbuilder PT Palindo Marine on the construction of five navigation vessels worth Rp 618.25 billion (US$46 million).

The vessels, the construction of which will be funded from the state budget, consist of three class I navigation ships worth Rp 370.95 billion and two navigation vessels worth Rp 247.3 billion.

According to the contract, the construction of the vessels will be completed by late 2017.

“This will take the number of navigation vessels built since 2015 to 20 vessels,” the ministry’s navigation director Bambang Wiyanto said.

The ministry currently has 63 navigation vessels, out of an estimated requirement of 125 vessels, with almost half of the vessels needing to be replaced because of their age.

The ministry aims to build 50 vessels over the course of five years, including some that are intended to be funded by loans from foreign investors.

“We have proposed to Bappenas [National Development Planning Board] to fund the construction through loans of 16 class 1 navigation vessels and four supply ships,” he said, adding that the construction would be put out to tender.

He said representatives from the Netherlands had come to the ministry to discuss the project, while, Japan would conduct an initial study.

“I don’t know when the construction will commence, it will depend on the Transportation Minister, Bappenas, as well as the loan approval,” he said.

The country has pledged to improve its sea transportation through the maritime-highway program launched by President Joko “Jokowi” Widodo to reduce the country’s soaring logistics costs, recorded at 23.5 percent of GDP.

Bappenas previously estimated that the government would need to invest around Rp 700 trillion between 2015 and 2019 to support the maritime-highway vision, including the development of 24 commercial seaports, 1,481 non-commercial seaports and the procurement of vessels.

Last year, the ministry procured more than 187 vessels, including 100 pioneering ships as well as 77 patrol vessels and navigation vessels.

With the allocation of Rp 48.4 trillion for the ministry from the 2016 state budget, the ministry also
aimed to add 48 patrol vessels and continue the construction of five livestock transportation vessels this year.

The Transportation Ministry has also stated that this year’s program related to sea transportation will remain on schedule despite the legal problems involving the director general of sea transportation Bobby Mamahit, who was recently put under arrest by the Corruption Eradication Commission (KPK).

Bobby was detained for alleged corruption in connection with procurements and the construction of a shipping education and training center in Sorong, West Papua, after he was named a suspect in October last year.

“It won’t have any impact because the programs have been set and there’s already an official at the technical level who can take over,” the ministry’s staff expert Hadi M. Djuraid said, adding that the minister had also appointed an acting director general for sea transportation to prevent negligence of administration problems.

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