In a bid to boost trade among regions, the Transportation Ministry is setting aside Rp 8 trillion (US$707 million) in the state budget to construct and develop ports and a shipping navigation system next year.
In the initial spending stage, the ministry's directorate general for sea transportation will receive Rp 4.36 trillion, extendible to Rp 8 trillion, the ministry announced recently.
The fund is part of the Rp 30.52 trillion allocated to the Transportation Ministry for next year.
"Projects related to the development of Tanjung Priok port (in Jakarta) and Belawan port (in North Sumatra) will be our utmost priority in spending for sea transportation," Transportation Minister Jusman Syafii Djamal said recently.
The developments are among 17 projects initiated by the directorate general for sea transportation for next year, 12 of which are projects carried over from 2008. The projects will immediately be put out to tender.
The country's port and shipping infrastructure come under the management and development of the ministry.
As the world's largest archipelago, Indonesia depends on sea transportation to ship goods between islands.
During the first semester of this year, Indonesia handled 255 million tons of sea cargo originating from overseas and 109 million tons from domestic origins. Last year, port operators handled 531 million tons and 227 million tons of foreign and domestic sea cargo.
The government has been intensifying efforts to boost public spending for infrastructure next year to help limit the impact of the global economic slowdown and keep employment robust.
The Transportation Ministry has estimated that about Rp 283.4 trillion will be needed for transportation infrastructure development if the economy is to be able to enjoy growth of more than 6.2 percent. The figure excludes spending for highways.
Around Rp 27.6 trillion of this amount is expected to be financed from the state budget, Rp 11.9 trillion from state companies and the remaining Rp 243.8 trillion from private investors.
Public Works Minister Djoko Kirmanto has said the government is looking to create 3 million new jobs next year through state-funded infrastructure projects. Up to Rp 34.9 trillion has been allocated for projects under his ministry alone.
The impact of the global slowdown on Indonesia's economy is likely to peak in the first half of 2009. Although the 2009 state budget has a projected growth of 6 percent, the government now expects the economy to grow by between 4.5 and 5.5 percent -- still higher than most economists' projections.
Aside from land clearance problems, overlapping regulations between central and local governments have proved the main stumbling block in the construction of infrastructure projects.
The situation has been exacerbated by most bureaucrats refusing to handle the projects for fear of being prosecuted by law enforcers, which have intensified their crackdown on corruption in government agencies.
The minister also stated that the number of Indonesian flag-bearing vessels increased to 7,661 units as of September this year, from 6,041 units in 2005.
Around 33.15 percent of the additional vessels were foreign-registered vessels owned by local businessmen re-registered locally, he said. (dis)
Transportation Ministry port and shipping projects
1. Tanjung Priok Port renovation 2. Belawan Port development 3. Lhokseumawe Port development (carried over) 4. Malahayati Port development (carried over) 5. Langsa Port development (carried over) 6. Calang Port development (carried over) 7. Malarko Port facility development (carried over) 8. Teluk Batang Port development (carried over) 9. Laut Sei Nyamuk Port facility development (carried over) 10. Bitung Port development (carried over) 11. Laut Bau-Bau Port facility development (carried over) 12. Laut Belang-Belang Port facility development (carried over) 13. Laut Arar/Sorong Port facility development (carried over) 14. Construction of two 2000 GT vessels 15. Construction of one 500 DWT vessel and one 750 DWT vessel for remote areas 16. Vessel navigational development (carried over) 17. Navigation facility and vessel traffic system development
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