End to port management monopoly may be near

The Jakarta Post, Jakarta

Transportation Minister Hatta Radjasa has promised that the management of the country's ports will improve significantly after the House of Representatives amends the 1992 Shipping Law in July.

Speaking at a seminar on port management held by the Business Competition Supervisory Commission (KPPU) on Monday, Hatta said the amendment of the legislation would abolish monopolies in the port sector and allow healthy competition to flourish.

"After the amendment of the legislation, the state will act only as a regulator, not an operator," he said. "This will, in turn, lead to fair competition and attract investors."

As a consequence of the Shipping Law, the management of the country's ports has long been monopolized by the various state-owned Pelindo companies.

In its study, the KPPU found that the current legislative framework had resulted in the Pelindo companies playing the role of both regulator and operator, which it said was clearly inimical to healthy competition.

"The absence of a clear regulatory framework is the principal flaw affecting the management of the nation's ports," stressed KPPU member Muhammad Iqbal.

He said that the monopolies enjoyed by the Pelindo companies were often availed of to fleece port users.

"For example, one of the Pelindo companies recently raised port fees after the fuel price hike without first consulting with the government," Iqbal said, adding that in reality port fees should be determined based upon an agreement between port operators and users, and then be approved by the government.

He said that the charging of rampant unofficial fees was another problem that needed to be immediately addressed by the government. "But this is more the result of lax law enforcement," he said.

Hatta said that the revision and amendment of the Shipping Law would lead to more investor interest in the construction of new ports.

"There are a lot of planned new ports slated for construction, including ones in Jakarta, Bojonegara in Banten, Makassar, Kalimantan and Papua," he said.

"Investors should definitely be interested in putting their money in as they will become the operators."

Hatta also said that come April the government would audit four of the country's main ports -- Tanjung Priok in Jakarta, Belawan in Medan, Tanjung Perak in Surabaya and Tanjung Emas in Semarang.

"The purpose of the audit is to find out why costs in our ports are higher than those in other countries. It will also investigate illegal touting in the ports and identify who is responsible for it," Hatta said. "After these four ports, we will then audit Cigading and Ciwandan ports (both in Banten)."

The country has 2,047 ports, 140 of which are seaports. (01)
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