WASHINGTON: The cash-strapped Transportation Ministry plans to hand over hundreds of government-controlled ports to state-owned port operators who are expected to better manage the facilities.
Speaking to The Jakarta Post on Thursday, the ministry’s director general for sea transportation, Antonius Tonny Budiono, said the ministry would give four state-owned port operators — PT Pelabuhan Indonesia (Pelindo) I, Pelindo II, Pelindo III and Pelindo IV — an option to choose from more than 1,000 ports currently managed by the government through its technical managing units (UPT). In total, the companies currently manage 112 ports across the archipelago. “The companies have the experience and the skill to manage our ports. They can also improve the level of service for users,” Antonius said.
The management handover, Antonius added, would also provide fiscal benefits to the ministry, as it could reallocate the funds previously allocated for the ports for other projects, including the procurement of new vessels. The move has been taken in the wake of budget cuts across government institutions as a result of a shortfall in tax revenues. Government spending for ministries and institutions was cut by Rp 16.3 trillion (US$1.2 billion) from the revised 2016 state budget earlier this year, after tax collection only reached a third of the full-year target despite being halfway through the year. The government plans to slash another Rp 65 trillion this year.
As much as Rp 1.2 trillion was cut from the Sea Transportation Directorate General’s budget in the first round of budget cuts, the largest cut for any directorate general in the Transportation Ministry. However, the ministry insists the handover is not just about the budget, as the ports are also expected to boost the country’s connectivity by operating as feeder ports for the main ports managed by the four Pelindo firms around the areas. Transportation Minister Budi Karya Sumadi previously said the handover, expected to begin immediately, would end the dual functions of the ministry as both regulator as well as operator of certain ports.
