Indonesia, German shipyard sign contract

The Jakarta Post, Jakarta

The Ministry of Transportation has signed a contract with German shipyard Meyerwerft for the construction and supply of a passenger vessel to be used in Indonesia.

The contract was signed on Wednesday in the presence of Minister of Transportation Agum Gumelar and German Ambassador to Indonesia Dr. Fulda.

The ferry, which can transport more than 3,000 passengers, is scheduled to be completed by September 2004.

The German government-owned credit agency, Kreditanstalt fuer Wiederaufbau (KfW), will finance the project using soft loan funds from the German Federal Ministry of Economic Cooperation and Development as well as its market funds.

The project will cost euros 74.6 million and have an interest of 1.8 percent per annum, according to a statement from KfW.

Meyerwerft was awarded with the supply contract after winning a competitive bidding in which four other German shipyards participated.

The project is aimed at improving maritime traffic links between the main islands of Sumatra and Java with the eastern part of Indonesia, particularly, Sulawesi and Papua.

"With the onset of the economic crisis, sea bound traffic has become even more important for Indonesia as nowadays only a small minority of the population can afford expensive airline tickets," the release said.

KfW noted that between 1997 and 2001, the number of sea passengers in Indonesia increased by more than 75 percent.

In 2001, state-owned sea transportation firm Pelni transported more than 10 million passengers. Of that number, more than 95 percent used economy class, representing the majority of society, KfW explained.

The new ferry will be operated by Pelni.

KfW has financed the previous 22 major vessels and two smaller additional ferries of Pelni's.