World Report

Transport projects for land, sea and air are gradually building an effective infrastructure to support economic growth

ndonesia’s transport network, the lifeblood of the nation, facilitates the movement of both goods and people across the country. On land, the railways remain the most popular form of transport between the major centres,
although new investment projects are raising the appeal of road travel. The road network has expanded rapidly in the last 25 years in line with the country’s economic growth.

Plans for improved transport services will boost links in a country of 17,000 islands

The railways have received substantial investment. Major new rail initiatives include the Jakarta to Surabaya double track railway. The Jakarta to Bandung double-track line was due for completion at the end of last year.

A number of urban mass-transit projects are also coming back into focus after the economic crisis put projects on hold. Among them are plans for a new monorail system serving Jakarta, in a bid to ease traffic congestion in the capital.

The image of Jakarta’s gridlocked streets will soon be a thing of the past. The Jakarta outer ring road was also set for completion in 2003.

Around the country, there are plans to create a new set of modern highways linking the major population centres. This includes the development of more toll roads, regarded as something of a priority. More than 300 miles of toll roads are already in operation, much of it operated by private companies.

In such a large country, however, air transport is often the easiest way to travel, especially to the more remote areas. National carrier Garuda Indonesia serves all the country’s principal cities and local capitals, and competes with a number of other smaller domestic airlines. In total, there are 500 airports and airstrips dotted throughout the archipelago.

In a nation of islands, though, it is only natural that sea transport is important too. The shipping industry is one of the most open sectors in the country. Over the years the local maritime sector has evolved from extensive public sector involvement and restrictive licensing to a much more liberalised and decentralised system.

Jimmy A.B. Nikijuluw
Director of Sea Communication
‘We must build and buy our own ships’

According to Jimmy A.B. Nikijuluw, Director General of Sea Communication at the Ministry of Transportation, Indonesia must become “archipelago-oriented” in its outlook. “The government is still land-oriented. They should know that the sea can be used for transportation and distribution purposes for the economic growth of Indonesia,” he says.

With more than 17,000 islands, the shipping industry is already an important means of transportation, distributing end products and raw materials across the country. Mr Nikijuluw believes that Indonesia must make more effort to develop its formal shipping sector, which serves the arteries of the nation. “After all, a nation can only be proud if it controls the ocean around it,” he says.

“We must build and buy our own ships rather than chartering them. By establishing a repair shop for ships we are also able to save on foreign exchange, to train young people and to help develop skilled labour.”

The indigenous maritime industry is growing. At present there are more than a thousand shipping companies although most of these are relatively small in size. The fleet of merchant ships, for example, numbers only 2,500. On this count, Indonesia still scores higher than most other Southeast Asian states but it remains behind Malaysia and the Philippines. In terms of average ship size though, Indonesia comes last, with an average size of just 1,365 tonnes, compared with 12,437 tonnes in Singapore. The Indonesian fleet is also among the region’s oldest and renewal is a matter of urgency. Local shipping firms carry approximately 60 per cent of Indonesian sea traffic while foreign vessels take the rest. More work is required to alter the status quo.

Mr Nikijuluw believes that one of the problems facing the development of the local maritime sector is high local interest rates, which make commercial borrowing prohibitive. Unfortunately, there are few companies worldwide that can afford to self-finance their own ships. Financing must be made more accessible, he says, “so that investment may come directly and join our national shipping company.”

Substantial funds are also required in the maritime infrastructure, the port facilities themselves, for the industry to progress long term. Again, investment is the key issue.