The Indonesian government has worked on logistic distribution by constructing marine highways to connect Papua and West Papua. Let’s take a look at it!
If you live in Java, you will know that the price of the same product will be different outside Java. You can notice it on the cover of a magazine which usually states different pricing inside and outside Java.
It is a huge advantage experienced by people outside Java for a long time. It makes almost every commodity becomes more expensive. Thus, the Indonesian government works on the Marine highway program to overcome the situation. The program will connect several ports in the land of Cendrawasih, including West Papua.
Dr. Drs. Muhammad Musa’ad representing the Governor and Vice Governor of Papua, stated that the highway would cover Merauke, Kokas, Sorong, Supiori, and Depapre ports. The construction of “tol laut” aims at solving the interregional prices disparity problem by accelerating logistic distribution.
Previously, the rice from Merauke should be sent to Surabaya, located in East Java, before reaching Jayapura. It is not effective because Merauke and Jayapura are located in the same province, while Surabaya is located on the west side of Indonesia. Besides causing a costly commodity delivery, the ineffectiveness causes the delivery length to triple.
With the Marine highway, the commodity from Merauke can be directly sent to Jayapura and then distributed to other regions. And other regions can send other commodities which are hard to find in Merauke. And those all require way less cost and time.
Investment Opportunity for Papua and West Papua
Marine transportation plays a strategic role in supporting national development. Thus, Transportation Minister Budi Karya Sumadi stated that the Central government wants to accelerate many infrastructure developments. It especially to increase connectivity between Papua and West Papua provinces.
Thus, the government asked all parties involved in the Marine highway for supports. It results in the acceleration of the program realization. It is seen as a good start for efficient logistic distribution in the future.
The development project includes optimizing the operating multi-purpose and container yard ports, increasing the transaction in the form of capacity and volume of local natural resources, and optimizing tourism destinations to attract international tourists.
This project is huge. And a huge project requires tangible funding. To gather this whopping amount of money, the government needs some planning. It includes calculating the investment opportunities. So, the total funding is not fully charged to the state and it can be divided into several parties. Besides, the yield of the project is expected to get multiplied.
Also read: Special Economic Zone
Depapre port is a part of the National Strategic Areas and National Strategic Program of Marine Highway. The reason behind this is that the port is located in Tanah Merah Bay. This bay is adjacent to the Pacific Ocean. Thus, this place is considered strategic as it can open a chance to become an international trade hub.
As per the initial goal, the development of Depapre Port should not only be about sea transportation but also as the drive for the local economy. Although the port is central to this program, it is expected that the port benefits the Papua province and West Papua , which is also a part of the marine highway project development.
Also read: Connectivity in Papua and West Papua
Pros and Cons of the Program
The eastern region of Indonesia is not the only party that will benefit from this program. This program involves 26 marine highway routes, including Tanjung Perak, Surabaya, and East Java. Since 2015, the project has run to its course as private shipping companies have agreed to operate seven routes. Meanwhile, the rest are operated by state-owned shipping company PELNI.
Despite the good progress, there are some opinions against the program. Zady Ilham Masita, the Indonesian Logistics Association (ALI) Chairman, slammed it as ineffective. It is because the program did not increase the sea freight volume, which had decreased by 50 percent due to the pandemic.
His statement was based on the data received from the association stating that there was a decline in business performance by more than 50 percent. Meanwhile, the logistic volume decreased by up to 70 percent. And all of those were due to the pandemic.
Indonesian National Shipowners Association (INSA) also reported that ship revenue fell by 10 to 25 percent from normal. It is in line with the revenue decline of bulk carriers, like tankers, tugs, and barges, by 25 to 50 percent.
Despite the decline, Carmelita Hartoto, the INSA chairperson, got a more positive thought on the program. She stated that private shipping companies were ready to collaborate with the government in supporting the program. She was also grateful that the shipments could still operate during the pandemic.
But, she did not hide that the program was still struggling with issues. Those issues included route monopolies and low cargo loads return, especially after the ships went back from Papua and West Papua.
Whatever the controversy is, let’s hope for the best. Besides, the government has done all means necessary for the success of this program.