Tue, 06 Oct 2009
From: The Jakarta Globe
By Arti Ekawati
The domestic coal-shipping sector is ready for the introduction of shipping regulations requiring all power station coal to be carried by Indonesian-flagged vessels from Jan. 1 next year.

Around $4 billion has been invested in preparation for the change so far, said Indonesian National Ship Owners (INSA) chairman Johnson W Sutjipto.

“We will be ready to implement the cabotage system for the transportation of power-station coal in domestic waters,” he said on Sunday in Jakarta.

Cabotage means the right of governments to require that only domestic companies can carry goods and passengers between two ports in that country.

INSA expects that domestic vessels will have the capacity to carry 32.5 million tons of coal this year, up from 29.3 million tons of coal in 2007 and 30.1 million tons in 2008.

This will be more than enough capacity to handle the estimated 30 million tons of coal that will need to be shipped this year.

“The amount of coal being shipped will keep on increasing year to year,” Johnson said.

Foreign investors were welcome in the Indonesian shipping industry said INSA’s head of overseas relations and cooperation, Djoni Sutji, in an address to a seminar on investment in the industry.

“However, they can only own a maximum of 49 percent of the shares of one shipping company, with the other 51 percent being owned by Indonesians,” Djoni said.

Following a presidential decree issued in 2005, Indonesia has been gradually phasing in cabotage rules in different sectors and eventually aims to have all domestic cargo and passengers carried by Indonesian-flagged vessels.

Last year, regulations were introduced restricting the transportation of crude palm oil, coffee and vegetables to Indonesian vessels.

Most countries around the world continue to apply cabotage restrictions to one extent or another in both the shipping and aviation industries, although they are being eliminated among the member states of the European Union.



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