Shipowners ask for govt conducive policy

The Jakarta Post, Jakarta

The Indonesian National Shipowners Association (INSA) repeated on Thursday its call on the government to create a conducive policy to boost the country's ailing shipping industry.

Association chairman Firdaus Wadjdi said local shipowners had seen their share in the country's shipping market steadily declining and that the government's help was necessary for them to be competitive with foreign shipping firms.

"The share of national ships in the domestic market continues to decline compared with foreign ships," he said in his speech at the association's annual meeting.

The call for a conducive government policy has been repeated by the association for the past several years.

According to INSA's 2000 data, the local shipping companies had only a 4.62 percent share in the shipment of goods to and from the country, while foreign cargo ships transported 95.38 percent of the 354.3 million tons of shipped goods.

In the same year, local ships carried only 53.01 percent of the 152 million tons of goods transported locally, with the remainder transported by foreign ships.

Firdaus noted that the number of domestic ships owned by INSA members increased by 16.7 percent to 3.067 units in 2000, while their total capacity rose 3.6 percent to 4.2 million deadweight tons.

Firdaus cited several obstacles that hamper the development of local shipping. These include difficulties in obtaining loans from banks, the long duration of port stay and difficulties in obtaining fuel oil.

"Also a problem is the blockage of national trade ships and the seizure of the shipping documents," Firdaus said, but he did not reveal who blocked the ships and seized the documents.

He said the Indonesian government should treat local shipping companies the same way neighboring countries treat theirs to enable them to compete.

Analysts said that many foreign cargo ships operating in this country were actually owned by domestic business players. They listed their ships overseas to avoid high tax and bureaucratic obstacles.

One of the shipping lines Samudra Shipping Ltd moved its base to Singapore in 1993.

In 1999, the government scrapped value added tax on the purchase and lease of ships, docking and port services to help the local shipping firms.

Local shipowners hailed the move, but they said it was not enough as there were still excessive charges not imposed in neighboring countries, including 1.2 percent corporate tax and the mountainous levies imposed by the port authorities and related agencies.