Maritime highway: Keeping the spirit and hope of people in eastern Indonesia

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily : Tol Laut Menjaga: Asa dan harapan Rakyat di Timur Indonesia

4 September 2019

Jakarta – The mission to return Indonesia’s glory as maritime axis has become one of the government’s strategic program during President Joko Widodo’s administration through maritime highway development. The maritime highway is not a construction of a toll road above the sea. Maritime highway is a form of maritime connectivity through organised, planned, and continuous sea transportations from western Indonesia to eastern Indonesia, and vice versa.

The maritime highway development program is a breakthrough for Joko Widodo administration to handle disparities or differences of price in a region to another region. Until now, price disparity of goods has become the main cause of uneven development. The main cause of this price disparity is that Indonesia is an archipelago state where the distance between islands is very far. Transportation costs are very high, so it affects goods or commodity prices in an island to be terribly different to another.

Maritime highway development has entered its fifth year. There are several main goals that want to be achieved by maritime highway, including, apart from connecting all ports in Indonesia, providing a sea transportation network that is permanent and organised, improving connectivity, and smooth out goods distribution in Isolated, Outermost, Lagging, and Border (T3P) areas.

However, the issue that often rises and has become a problem for maritime highway implementation is that maritime highway still cannot effectively create a sense justice for all citizens across Indonesia. In western Indonesia, various facilities are built to facilitate citizens from the upper classes. Meanwhile, citizens in eastern Indonesia who just want to buy basic needs with the same price as Java are often protested.

The budget allocated by the government to subsidy maritime highway transportation, which includes pioneering sea transportation and cattle shipping, is expected to benefit the citizens of eastern Indonesia. Eastern Indonesia still needs to be optimised so that it can contribute to western Indonesia and Indonesia’s economy. However, basic needs of the citizens such as food, clothing, and housing must still be fulfilled with prices that are not so different with western Indonesia. This is where the importance of justice comes in. Without differentiating any regions, maritime highway must be implemented without omitting supervision and evaluation so that it can be more effective in the future.

According to the Sea Transportation Director General of the Transportation ministry R. Agus H. Purnomo, all sea transportations subsidised by the government is part of the maritime highway fleet, and it should be able to provide the best benefit for national economic development.

“Maritime highway does not only transport goods but all elements of the subsidised fleet, such as maritime highway ships for logistics, pioneering ships, as well as cattle ships, are all part of the maritime highway fleet that must synergise and benefit a wide range of citizens,” Director General Agus Purnomo explained in Jakarta.

Agus continued that, for the operation of maritime highway, all maritime highway fleet, including maritime highway ships for logistics, pioneering ships, as well as cattle ships, must synergise and cooperate with one another. As an example, he mentioned that from 2019 all routes of maritime highway ships for logistics were to be connected to pioneering ships. This connectivity is established to address the issue regarding dock size and capability in eastern Indonesia, as well as effects of extreme weather during shipping.

“The principle is that all goods transported by the maritime highway fleet for logistics have to be able to enter or reach ports in T3P islands, as long as there is [a terminal] for cargos [going] in and out,” Agus Purnomo said.

According to Sea Transportation Director General R. Agus H. Purnomo, after the maritime highway program is planned by Jokowi administration in 2014, sea transportation routes are assigned to be served by PT Pelayaran Nasional Indonesia (Persero). The assignment is stated in Presidential Regulation Number 106 of 2015 on Organization of Public Service Obligation for Goods Transportation at Sea, followed by the publications of Transportation Minister Regulation Number PM 161 of 2015 on 16 October 2015 on Public Service Obligation for Marine Cargo and Transportation Minister Regulation Number PM 168 of 2015 on Sea Freight Rates in Order to do Public Service Obligation.

In relation with the evaluation of maritime highway program, Agus said that issues that still surface in maritime highway implementation was related to the return capacity of maritime highway ships from a number of regions in eastern Indonesia, which was empty.

As what has been said by Transportation Minister Budi Karya Sumadi when he was accompanying President Jokowi during his working visit to Kupang some time ago, until now, maritime highway ships which transported containers from Jakarta and Surabaya would be relatively empty or only filled around 20% to 30% capacity during return trip.

In relation with maritime highway cargo, involved ministries and institutions, including regional governments, must further optimise the potential load and the local policies in certain regions. Meanwhile, if a maritime highway cargo turns out to be prohibited, there should be supervision from when the cargo was loaded to when it was received. Until now, shipping companies only receive goods in crates or cargos sealed by the owner so that it is impossible to know the content of the crate for sure.

Thus, the main problems faced by maritime highway implementation are not at the ships or the shipping companies as operators, but at the lack of return capacity which needs a cross-sector coordination.

Besides that, still in relation with maritime highway evaluation, Transportation Ministry Budi Karya Sumadi said that, in the future, the Transportation Ministry will optimise maritime highway implementation, including evaluations for pioneering ships and cattle ships.

According to Budi Karya, currently, maritime highway program, pioneering ships, and cattle ships have been implemented well. Until now, the cattle volume has reached 46,000 tons and it is set to reach 70,000 tons this year.

In the future, livestock products can be shipped in a frozen state to anticipate empty maritime highway capacity during the return trip to Jakarta, Transportation Minister Budi stated.

The Transportation Minister also stated the importance of involving Small Medium-Sized Enterprises (SME) for the government’s plan of transporting livestock products from NTT (East Nusa Tenggara).

Meanwhile, according to the Transportation Minister, maritime highway ships and pioneering ships will be utilised for commercial routes, thus ships will still be operational without subsidy while maintaining affordable prices for the citizens. It is currently being considered and calculated by the Transportation Ministry and the Sea Transportation Directorate General so that citizens will still be able to enjoy the benefits.

Besides that, the government will present an award and a high appreciation for maritime highway ship operators such as PT Pelni, PT ASDP, PT Djakarta Lloyd and PT Pelabuhan Indonesia which have helped the implementation of the maritime highway program to go well and smooth.

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