Kemhub will stop ordering vessels in 2017

JAKARTA. Ministry of Transportation (Kemhub) will stop ordering new vessels in 2017, due to the lack of budgets. Let alone, some of the 2016 vessels procurements have not settled yet.

Director General of Sea Transportation at Ministry of Transportation Antonius Tonny Budiono said, this year the ministry will focus on completing the multi years contracts on vessels constructions. “It is due to the budget limitation,” Antonius told KONTAN, last weekend.

Along the last year, the government had ordered about 150 units of vessels. “Normally, the government conducted tender for 50 units,” said General Chairman of Indonesian Maritime Pioneer Novirwan S Said, last weekend.

To date, the government is conducting constructions of 193 units of vessels, consist of patrol vessels, 750 GT ferry, 1200 GT ferry, 2000 GT ferry, 100 TEUs container, and navigation vessels.

The moratorium of vessels procurement will reduce the utilization of domestic shipyard industry. “Definitely, the constructions of new vessels will be declining,” said Director of Maritime, Transportation and Defense Equipment Industry at Ministry of Industry Yan Sibarang Tandiele.

According to Yan, the shipyard industry may depend on reparation works. “The needs for reparation will be increaseing,” Yan said.

To date, the industrial capacities of domestic shipyard just reached 1 million deadweight tonnages (DWT) per year, with the utilization of 65%, while the capacities of vessels reparation reached 12 million DWT with the utilization of 85%.

Novirwan said, the domestic shipyard industries lack supporting equipment and components. This is inhibiting for the vessels constructions. Therefore, Novirwan requested the government to remove value-added tax on shipyard industry, as is applied to Batam as free trade zone area. “We ask for the equality,” he added. (Muhammad Farid/Translator)