Govt defends hikes in seaport service rates

Govt defends hikes in seaport service rates

JAKARTA (JP): Directorate General of Sea Transportation
Soentoro yesterday vowed to improve efficiency of port services
following the recent rise in rates of five port services.

The country's ports, for example, will improve navigation
services, he told reporters after signing an agreement on
consulting services for vessel procurement.

The government recently raised fees for five port services by
a range of 14.28 to 50 percent for domestic shipping and a range
of 7.5 to 32.35 percent for foreign shipping. The fees raised
include those for the leasing of mechanical and other related
tools, passenger entry and containers at the ports of Belawan
(North Sumatra), Tanjung Priok (Jakarta) and Tanjung Perak (East
Java).

Executives of the Indonesian National Ship-owners Association,
the Association of Freight-forwarders & Expeditions and the
Indonesian Importers' Association have expressed disappointment
over the unexpected increases. Members of the House of
Representatives, worried about the impact on inflation, have also
expressed concern and said they will ask Minister of
Transportation Haryanto Dhanutirto to weigh the reasons behind
the hikes.

Information

Soentoro said yesterday that the government had actually
informed the executives of the associations about the fee
increases.

He stressed the importance of the ports needing to be solvent,
pointing out that the fees had not been increased since 1988,
whereas electricity rates have been raised three times since then
-- by 25.4 percent in 1991, 27 percent in 1992 and 7.6 percent
this month. Fuel prices were also raised by 22 percent in 1991
and by 27 percent last year.

"The increase in port service fees should not be dramatized
because the impact is estimated to raise freight costs and
overall prices by only 0.1 to 0.6 percent," Soentoro said.

He said executives of the state-owned port management firms --
PT Pelabuhan Indonesia I, II, III and IV -- had also told
legislators about the companies' financial problems and advised
them that they might increase the fees.

"Pelabuhan Indonesia II, for example, might have suffered
a decrease of Rp 7 billion in revenue if the fees were not
raised," he said.

With the fee increases, this year the government expects a
total profit of Rp 31.04 billion from Pelabuhan Indonesia I, Rp
111.53 from Pelabuhan Indonesia II, Rp 39.83 from Pelabuhan
Indonesia III and Rp 7.57 billion from Pelabuhan Indonesia IV.

Amir Harbani, president of Pelabuhan Indonesia II which
manages the Tanjung Priok port in Jakarta, said that the four
port management firms will charge the old rates to shipping
companies which had ordered services before Nov. 1.

Harbani said the port service fees, after the increases, are
still much lower than those in other Southeast Asian countries
including Singapore and Thailand.

Navigation

Meanwhile, Soentoro also said yesterday that Indonesia will
soon refurbish its navigation vessels.

"Currently, we have 72 navigation vessels of various types, 43
of which are already 25 years old. To ensure optimum operation,
both for installation and maintenance of navigational aid
facilities, refurbishing of the old vessels is necessary," he
said.

The rejuvenation will be based on the consulting service made
under yesterday's agreement, which was signed by Soentoro, head
of the navigational survey, A. Tonny Budiono, director for
operation of PT Tomo & Son Soegiri Prawirodirdjo, and the
executive director of Overseas Shipbuilding Cooperation Center of
Japan, Hisashi Ando.

Tomo & Son and OSCC will carry out the project.

Phases of the project of the development of navigation
facilities comprise of consulting, designing and tendering.

The consulting service, to be undertaken in two and a half
years, has a contract value of 76.26 million yen and Rp 424.09
million (totaling about US$978,000), and will be partly financed
by the Overseas Economic Cooperation Fund of Japan.

The fund earlier supported the procurement of four vessels for
the same program, in which the winner of the tender will be
announced in the near future.(icn)