Cutting Red Tape for New Ports
Jakarta. The Investment Coordinating Board, or BKPM, plans to reduce the number of permits for building ports, in a move to accelerate their construction to allow for more goods to be distributed across the archipelago, an official said on Tuesday.
BKPM chairman Franky Sibarani said he will work with ministries and government institutions, including local institutions, to determine the types of licenses that can be erased to accelerate the process.
“In a meeting with Pelindo III, BKPM and Gresik local One-Stop Integrated Service Centers have agreed to accelerate the permit process. We will map the types of licenses and determine its necessity. Pelindo III’s experience will be very helpful in the process,” he said.
Franky did not elaborate on how much time the agency plans to reduce for the port permits process. As a reference, BKPM was successful earlier this year in reducing the time needed to secure permits for power plants to 256 days from 923 days.
In building ports or power plants, an investor must secure permission — including principal permits, environmental permits, land permits, among others — from the central government.
The investors then have to negotiate with local governments to secure building permits, proof of domicile, disruptions permits, and such. BKPM currently is only able to facilitate investors with permits from the central government.
Djarwo Surjanto, president director of state-owned port operator Pelabuhan Indonesia III (Pelindo III) , said he needed up to three years to process only for the administration permit to build a port in Surabaya, East Java, called Teluk Lamong. Teluk Lamong is expected to ease traffic at Tanjung Perak Port in Surabaya.
“If a port needs up to three years to process its administration permit, it would be very difficult to build 24 ports in the next five years,” said Franky, noting that President Joko Widodo’s administration has targeted to build and run the ports in 2019.
Pelindo III, through its subsidiary Terminal Teluk Lamong, operates the international multipurpose terminal Teluk Lamong Port. Teluk Lamong is one of four deepsea ports — the othes being Kuala Tanjung in North Sumatra, Kalibaru in Jakarta, and New Makassar in South Sulawesi — that will be fully operational in 2018 to serve as the backbone of Joko’s maritime axis.
The deepsea ports could reduce Indonesia’s logistic costs to around 19 percent of the nation’s gross domestic product from 24 percent, according to a government estimate.
Indonesia ranks 53rd out of 160 countries in the World Bank’s latest Logistics Performance Index. Southeast Asia’s largest economy lagged other regional peers, such as Singapore (5th), Malaysia (25th), Thailand (35th), and Vietnam (48th).
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Source: The Jakarta Globe