Indonesian ports play catch up
Expansion programme that aims to boost economy beset with red tape, delays
jakarta — Container ships dot the horizon off the coast of Jakarta, as cranes and labourers work on an ambitious, economy-boosting project to expand the port network in the world’s largest archipelago nation.
New Priok will be Indonesia’s biggest port once completed, and is one of 24 ports planned to overhaul maritime connections in Southeast Asia’s top economy.
President Joko Widodo is leading efforts to improve dilapidated maritime infrastructure in a country where ships face lengthy delays before berthing and goods can get stuck for days as they run a gauntlet of government agency checks.
“This is no longer a wish, but a necessity,” Widodo recently said of improving ports after Indonesian growth hit a six-year low of 4.7 per cent in the first quarter.
The port plan is part of a broader scheme to improve infrastructure as the country seeks to lure foreign investors and pull out of a long slowdown driven by falling prices of its key commodity exports.
Action is urgently needed — Indonesia’s infrastructure is so woeful that it is cheaper to transport goods from China to the country’s most populous island of Java than to bring them from the Indonesian part of Borneo, which is far closer, according to the World Bank.
Improving ports is particularly critical for a nation that is home to important shipping routes. As well as attracting new investment, the scheme could reduce the price of consumer goods through lower transport costs and develop more remote parts of the archipelago.
containers handled
annually by Tanjung Priok port
Container ships dock at the Tanjung Priok port in Jakarta. New Priok will be Indonesia’s biggest port once completed and is planned to overhaul maritime connections in the country. —
Widodo is taking a personal interest in the project but it faces formidable challenges.
There are growing doubts his administration will be able to push through the plans due to a lack of organisation and a dysfunctional bureaucracy.
On a recent visit to Tanjung Priok port in Jakarta — which handles much of Indonesia’s international trade — Widodo’s frustration at slow progress was clear when he delivered an angry tirade over the failure to substantially cut the time it takes goods to move through the facility.
The target date to complete all the ports is 2019. But even if the target is met, which seems doubtful given many infrastructure projects in Indonesia suffer delays, experts say this alone will not solve the problem of red tape and graft that slows down processing of goods.
“Building hardware is a critical element in the wider scheme of things,” said Jayendu Krishna, a Singapore-based analyst with industry consultancy firm Drewry Maritime Services.
“An equally important element for success will be tackling bureaucracy and corruption, otherwise it might turn out to be much ado about nothing.”
Nevertheless, industry players sense renewed momentum under the new president.
“I am very optimistic, we’ve got very strong support from the top,”
Chief operating officer
at Tasneef
Al Hebsi added: “We launched Tasneef Maritime Academy to be a reference point in the region for all those who are interested in a career in inspection and maritime classification. The Academy also aims to develop the technical caliber by working with several companies operating in the region.”
Capt. Waleed Al Nahdi, commercial and marketing director at Tasneef, said: “Our third year is marked by our announcement of taking over 50 per cent of the inspection and classification services in the region.”
Eng. Omar Abu Omar, chief operating officer at Tasneef, said: “Tasneef is supported by the largest shipping, oil and gas companies in the UAE. Tasneef ’s clients include major companies such as Esnaad, Irshad and Tawazun Dynamics in addition to Adnoc and ADNATCO-NGSCO.”
Tasneef had earlier signed a memorandum of understanding (MoU) with Drydocks World and Dubai Maritime City (DMC) to provide classification services to the world’s first LNG-powered harbour tug”.
Abu Omar added: “Tasneef is taking steps to expand its services regionally and internationally. For example, new ships are being established in Romania under our supervision.”