Ministry Promises to Correct Flawed Sea Toll Road Program


FEBRUARY 23, 2018

Jakarta. The Ministry of Transportation is going to improve the so-called sea toll road program, after a study has found that larger logistics companies have been exploiting it to obtain subsidies.

According to the study, which was conducted by Maritime Research Institute Nusantara (MRIN), the program failed to lower shipping costs from Java to less developed eastern regions, because big companies have been blocking smallholders from accessing slots in subsidized cargoes.

"We appreciate the observations by MRIN regarding our sea toll road program," the ministry's head of sea transportation, Wisnu Handoko, said in a statement on Thursday (22/02), adding that the institute's findings reflect quite complex problems.

"We admit that it is due to weak supervision by government agencies," he said.

President Joko "Jokowi" Widodo's sea toll road program was supposed to cut logistics costs by 30 percent to reduce disparities between Java and eastern regions, such as Papua and East Nusa Tenggara, where food prices can be even six times higher.

So far, however, the program managed to cut the costs only by 15 percent.

"In the future, shipments will have to be authorized by state-owned companies such as Pelayaran Indonesia, Pos Logistik and Semen Indonesia ... We also will implement more transparent procedures," Wisnu said.

The program prioritizes staple commodities — rice, sugar, cooking oil, flour — and cement to boost infrastructure development. These products will obtain special stickers to prevent manipulations.

Wisnu said the ministry is also going to built warehouses in all ports included in the program to make distribution more effective.