Tue, 04 Jul 2006
Government blamed for messy port management

Rendi Akhmad Witular, The Jakarta Post, Jakarta

Small domestic-bound ports that manage international containers are to blame for the massive scale of smuggling in the country and are preventing international ports from providing better services, an Indonesian shipping association has said.

With many ports accepting international containers, smuggling supervision has become harder, as the management of such containers is not concentrated in one area but scattered over more than 130 ports throughout the country.

"The decision of the Transport Ministry and (state port operator) Pelindo to allow smaller ports to provide international services only encourages smuggling," Toto Dirgantoro, a senior executive at the Indonesian National Shipper's Council, said recently.

He said it would be just impossible for the customs office to supervise the inspection of incoming international containers because vessels carrying such containers were docking at ports meant for local containers only.

According to the Transport Ministry, the country has 1,670 ports, of which 160 handle international goods.

"There are so many ports with licenses to manage international goods. This is not only fueling smuggling but also hurting ports that should function as international hubs. The country should only have four international ports," said Toto.

He said Jakarta, Surabaya, Medan and Makassar should have one international port each, which would enable the authorities to fully supervise the arrival of international containers.

Jakarta alone has four ports authorized to manage international containers, even though the Jakarta International Container Terminal, which was supposed to become an international hub, is meant to be the only port allowed to carry out such a function.

Industry Minister Fahmi Idris said recently that losses in tax and duties due to illegal imports rose by about 95 percent last year, up to US$970.9 million from the previous year's $498 million.

The losses are mainly cause by the illegal import of six major industrial products, steel, textiles, shoes, ceramics, electronics and toys, most of which come from China.

Toto also said that aside from driving smuggling, these domestic-bound ports had caused existing major ports -- which should serve as international hub -- unable to feasibly provide direct shipment to international destinations.

"Mother vessels could not come to us because the amount of the containers are not feasible to be carried by the vessels. This condition has only caused more transhipment from the smaller ports to bigger ports in Singapore or in Malaysia," he said.

Meanwhile, Transport Minister Hatta Radjasa recently told The Jakarta Post his ministry was in the process of revoking its permission for smaller ports to accept international containers, with the results to be announced within the next three months.

"There should be a clear distinction between hub ports, national ports and regional ports in order to ensure better organization and greater efficiency. This reorganization is part of our overall reform of the maritime sector," said Hatta.

He said he was concerned by the numbers of ports in remote areas of the country serving international traffic without adequate supervision from the authorities.



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