Mon, 03 Mar 2008
From: The Jakarta Post
By Novia D.Rulistia , The Jakarta Post
The protracted problem of damaged roads in the capital, which has caused massive traffic congestion leading to Tanjung Priok port, has forced exporters to spend 15 percent more on delivery costs.

Indonesian Exporters Association (GPEI) secretary general Toto Dirgantoro told The Jakarta Post recently, due to the unpredictable arrival times of exported goods at the port exporters were required to pay additional administration costs.

"Delivery costs (from manufacturers to the port) may increase by around 10 to 15 percent, since exporters are paying higher loading fees and additional administrative costs," Toto said.

Late delivery at the port would cost an additional Rp 45,000 (US$5) per 20-feet container per day for the first 10-day period, and Rp 67,500 after that, he said.

Exporters were also required to pay additional administrative costs if their letter of credits (L/C) was terminated, he said.

"The increasing costs of delivery will definitely put added burden on exporters -- mainly small and medium enterprises (SMEs)," Toto said, adding that firms had been making less profits since the rainy season exacerbated road damage.

According to the State Ministry for Cooperatives and Small and Medium Enterprises, in 2006, SMEs accounted for some 20.3 percent of all national non-oil-and-gas exports.

One government report claims up to 60 percent of Indonesia's imports and exports were made via the Tanjung Priok port.

Land Transportation Organization (Organda) had previously said the damaged Cakung-Cilincing highway (heading to the port) could cause losses as high as Rp 2.2 billion per day in trailer rental costs.

Economist Faisal Basri said the damaged highway could diminish the country's competitiveness in the global production network.

Such conditions, he said, could scare away new international investors as well as encouraging existing investors to look elsewhere.

The most affected companies, Faisal said, were the manufacturers, such as component makers.

"Among all southeast Asian countries, we sit at the bottom in terms of the global production network," he said.

"One way to solve the problem is to make direct access to the port without having to use an inner-city highway," he said, adding that the government should take immediate action before the damaged road gets worse.

Indonesia's transportation infrastructure recently ranked 91st among 131 countries surveyed by the World Economic Forum, dropping from 89th position last year.

The government has allocated Rp 33.8 trillion to improve the country's transportation infrastructure.



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