Pelni in troubled waters, sends SOS for life raft
Pelni in troubled waters, sends SOS for life raft
Indra Harsaputra, The Jakarta Post, Surabaya
State-owned shipping company PT Pelni, currently navigating
some stormy fiscal waters, renewed calls for financial help,
warning that unless the government floated them more money, the
company would have to lay off many workers.
The shipping line is now suffering losses of Rp 4 billion per
month due to the decrease in the number of passengers and rising
costs, particularly fuel costs.
"Unless the government subsidizes us, we will have to cut the
number of our workers," Chaerul Djamal, the head of Pelni's
branch office in Surabaya, said on Wednesday.
Chaerul said Pelni had asked for Rp 220 billion in government
subsidies.
For decades, the shipping line has been the major
transportation means for thousands of people traveling across the
archipelago, particularly low-income travelers. However, business
has taken a plunge following the liberalization in the airline
sector, which has resulted in the emergence of many private
airlines and much cheaper air fares.
Chaerul said Pelni's revenue now averaged around Rp 16 billion
per month, while operating costs averaged some Rp 20 billion.
In the first quarter of the year, it booked Rp 97 billion in
losses, which forced it to cut the number of its destination
ports by 25 to 65 as part of cost cutting measures.
He said the decrease in airline fares as a result of greater
competition had cost many potential customers, who previously
cold not afford air tickets.
"For instance, Pelni sells tickets for business class on the
Surabaya-Bitung route for Rp 1.45 million per person. In
comparison, an airline ticket on the same route only costs Rp 1
million," he said.
According to Chaerul, Pelni was unable to offer lower prices
than the airlines, "because our operating costs are higher than
the airlines." He said it was because the volume of fuel
consumed by a Pelni ship for most routes was four times higher
than the consumption by an aircraft traveling on the same route.
Fuel costs have become quite a burden for Pelni after state-
owned oil and gas company Pertamina raised the price on diesel
from Rp 500 per liter to Rp 1,600 per liter at the start of the
year, Chaerul said.
Separately, Tjuk Sukardiman, the director general of sea
transportation at the Ministry of Transportation, said the
government was studying Pelni's subsidy request and planned to
discuss it with the House of Representatives at the end of this
year.
According to the company's website, Pelni has 43 ships,
including 23 luxury types. But, no information is available on
the number of its workforce.