Operational costs surge, Gapasdap demands fare adjustment

The Indonesian National Association of River, Lake, and Ferry Transport Operators (Gapasdap) is urging the government to immediately adjust ferry transport fares to rescue the industry from the current sharp surge in various operational cost components. Togar Napitupulu, Chairman of the Gapasdap Merak branch, explained in a statement in Serang, Banten, on Saturday that business operators are increasingly pressured by price hikes influenced by fluctuations in the US dollar exchange rate against the rupiah. This increase directly impacts the maintenance costs and procurement of imported ship components. Togar detailed that the price of marine lubricants has now soared by up to 60 percent. Additionally, spare parts prices have risen in the range of 30 to 40 percent, while docking and ship classification renewal costs have increased by approximately 20 percent. “The ferry transport fares currently in effect do not at all reflect the operational cost requirements that companies must bear. In fact, these various cost components are mandatory requirements to meet safety standards,” he said. He explained that, based on evaluation results in 2019, ferry transport fares were actually still around 31.8 percent below the Cost of Goods Sold (HPP). Unfortunately, the government has not yet realised the shortfall to date. Amid the squeeze on operational costs, ship operators are still required to meet all service, security, and safety standards in accordance with the mandate of Law Number 17 of 2008 on Shipping. The financial condition of companies is also aggravated by the declining frequency of sailings due to the addition of fleets on the same routes, making the opportunity for each ship to earn income from the number of trips increasingly limited. Togar reminded that if the fare adjustment fails to materialise and triggers a decline in service quality or safety in the future, the regulator must also bear responsibility for that condition. Besides urging the implementation of new fares in line with the HPP, Gapasdap also proposes that the government provide stimulus to reduce operational burdens. Several strategic proposals put forward include the elimination of Non-Tax State Revenue (PNBP), the removal of fuel tax, reductions in port and classification fees, and the provision of low-interest credit facilities for the maritime sector as implemented in neighbouring countries.