Customs procedures hamper shipbuilding
Customs procedures hamper shipbuilding
JAKARTA (JP): State-owned docking and shipbuilding companies said recently that customs procedures for importing engines and components and the high interest rates on domestic loans hinder their competitiveness.
"Arduous customs procedures increase the costs of imports and often cause delays in the delivery of ships," state-owned PT Dok Perkapalan Koja Bahari's president, A. Wahid, told a hearing with House of Representatives' Commission VI for industry yesterday.
The directors of PT Dok Dan Perkapalan Surabaya which is based in East Java and the Ujungpandang-based PT Industri Kapal Indonesia also attended the hearing.
PT Dok & Perkapalan Surabaya's president Sudarman Sellang and La Adrian Ifie, president of PT Industri Kapal Indonesia, supported Wahid's complaints, pointing out that the shipbuilding industry still relies mostly on imported materials, engines and components.
Adrian also pointed out that domestic loan interest rates, which currently reach as high as 20 percent, are much higher than that of overseas loans which average only 7 percent.
Sudarman said that domestic shipbuilders are financially frail and cannot afford to accept orders for big ships because buyers usually make an advance payment of only 25 percent or less of the total cost.
However, Koja Bahari reported its great success last year in winning orders to build four Reefer ships from Sea Trade Groningen BV of Holland with a total price of US$225.4 million.
Wahid also complained that the January package of deregulation measures did not provide equal treatment to all domestic shipbuilding companies.
He urged the government to exempt all domestic shipbuilders from the value added tax and provide them with soft loans from Bank Indonesia (the central bank).
Earlier reports said that another state-owned shipbuilding company, PT PAL Surabaya, which is chaired by Minister of Research and Technology B.J. Habibie in his capacity as the chairman of the Agency of Strategic Industries, has been exempted from import duty on imports of components and materials. (kod)