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Industry players awaits govt commitment to boost domestic shipbuilding industry

JAKARTA (rambuenergy.com) – Shipbuilding and shipyard industry players are awaiting for the government’s concrete action to stimulate the growth of domestic shipbuilding industries following President Joko Widodo’s assurance that his government is committed to boost the industry which seems to have been neglected for long period.

The President on Monday (June 29) held a coordinating cabinet meeting to discuss ways on how to boost the industry as well as assess problems that have hampered the shipbuilding and shipyard industry.

The coordinating meeting was held after last week Presiden Joko Widodo visited a shipyard in Batam, Riau Island province as well as met with shipbuilding industry players. The President admitted that he was surprised to learn that there are 250 shipbuilding and shipyard companies across Indonesia and 105 of them are located in Batam and nearby Islands.

The President immediately called on state owned companies and domestic industry players to purchase domestic-made vessels. Some companies, like Pertamina, has ordered some of its tanker vessels to domestic shipbuilders to private shipyard companies in Batam as well as state-owned shipyard operator PT PAL Indonesia, based in Surabaya.

Industry players have voiced their concerned over lack of government’s commitment to boost domestic shipbuilding industry. They blamed import tax on ship or vessel components that have been imposed by the government, making domestic vessels to be more expensive than the imported vessels.

The government early this year has said that it studies a plan to scrap the import tax on vessel components, however, such move is yet to be realized.

Mardiasmo, deputy finance minister, said yesterday after attending the coordinating meeting at the State Palace that the government will speed up in providing incentives to domestic shipbuilding industries.

“The President has given direction that all facilities need to be given fast. We (Finance Ministry) will coordinate with the Coordinating Ministry for Maritime Affairs as well as related ministries,” he said.

The government, he said, considers providing tax allowance and cut the import tax on components to zero percent. The import tax will be shouldered by the government, he said.

Currently, shipbuilding industries are developed quite well in Batam industrial zone as the government has scrapted import tax for shipbuilding industry players there. However, shipyard and shipbuilding companies operating outside the industrial zone are still charged with import tax on the imported components.

President Joko Widodo said stimulating the development of domestic shipbuilding industries will support his government’s drive to create the so-called Maritime Axis in the archipelago. “This can be achieved if we can produce our own world-class vessels,” he said.

Meanwhile, Chairman of the Association of Shipbuilding Producer and Offshore Companies (Iperindo) Eddy Kurniawan Logam said industry players are now waiting for the realization of the government’s commitment in the form of scrapping the value added tax as well as import tax on imported components as those components are not available in domestic marke. (*)

Written by Roffie Kurniawan

roffie.kurniawan@rambuenergy.com

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