Local shipbuilders rely heavily on imported parts because of a lack of local manufacturing capacity. (Antara Photo/Syifa Yulinnas)

For Shipbuilders, Life’s a State-Funded Beach

BY :RAHAJENG K.H.

JANUARY 05, 2016

Jakarta. Indonesian shipbuilders expect a bumper year thanks to orders from state-owned energy company Pertamina and the maritime ministry.

Pertamina has placed orders worth a combined Rp 4 trillion ($289 million) for vessels this year, while the maritime ministry has commissioned 3,325 new medium and small boats, according to Indonesia Shipbuilding and Offshore Association (Iperindo) chairman Eddy Kurniawan Logam.

“This will be a very busy year for the country’s shipbuilders,” Eddy told the Jakarta Globe.

However, he noted that orders from the private sector remained scant, blaming a drop in global commodity price for compelling companies to cut back on their spending.

Iperindo is urging the government to waive import taxes on ship components and spare parts, in light of the high costs brought about by the weak rupiah. Local shipbuilders rely heavily on imported parts because of a lack of local manufacturing capacity.

The government last month announced an import tax exemption on airplane components, as part of its series of economic stimulus measures aimed at cutting red tape and reinvigorating economic growth.

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