Clear the ports of bad communication, low budgets

Tanjung Priok Port in North Jakarta has been hit by numerous strikes, with the most recent taking place on Jan. 16. A similar strike also occurred last December.

However, the strike, which was organized by the workers’ union of the state-owned port company PT Pelabuhan Indonesia II (Pelindo II), had no serious impact on the overall operations of Indonesia’s busiest port.

No serious impacts were felt because Pelindo II does not actually operate the terminals at the port directly; they are handled by third parties, popularly called terminal operators, which are largely stevedoring companies. Pelindo II only provides the billing for their services.

The workers’ union also launched strikes at other ports that are under the supervision of Pelindo II, including Panjang in Lampung, Teluk Bayur in West Sumatra and Pontianak in West Kalimantan.

Though the strikes were predicted to paralyze the ports, fortunately everything continued to run smoothly.

There were, however, heavy traffic jams within the Tanjung Priok Port and the road access adjacent to the facility. Shippers who were scared of delays in their cargo reaching consumers significantly contributed to the congestion.

So, the situation was more a psychological than a technical one. This is the fundamental problem at Tanjung Priok, as well as other big harbors across the country.

The problem is the environment of bad communication among the port’s business players. At this point, we are talking about the Otoritas Pelabuhan, or Port Authority (PA). Why do we need to mention the institution?

The agency, the PA, which has functioned effectively at the four major ports since mid-December 2010, is the highest government institution at the ports.

Provisions in the Shipping Act No. 17/2008 on the port authority state that the regulatory function is transferred from Pelindo II to the agency, leaving Pelindo II merely a terminal operator.

Pursuant to the act, the Transportation Ministry then endorsed the status of badan usaha pelabuhan, or port business entities (BUP), and the concession to Pelindo II following the shift.

The government thus terminated monopolistic practices in the country’s port business. For many years, Pelindo II had acted doubly as regulator and operator. Privately run port operators are also eligible for the status and concession.

Now, all parties in the port business have a level playing field, with the PA as their umpire.

The regulatory functions of the PA include managing and supervising the utilization of the port’s land and waters, monitoring port limits, regulating ship traffic, and setting up port performance standards.

But it is also obliged to provide land and waters for the terminal operator, prepare and maintain the breakwater, basins, ship channel and in-port roads, arrange and support navigation, uphold port safety, draw the port master plan and suggest port tariffs to the Transportation Ministry. These functions and obligations were previously delegated to Pelindo II. With all that power, the PA has now become the landlord.

However, the new arrangement creates problems for the PA. According to the Shipping Act, the agency is ordered to compensate all investments made by Pelindo II in maintaining port infrastructure, in which the total value must be assessed formally in advance by the state.

Up to now, this has never been done. The reason is that the PA would not be able to pay back the money the state-owned company had allocated for the infrastructure, as the amount would be huge.

The government spends almost nothing in maintaining port infrastructure; although the job is its responsibility, it is all covered by Pelindo II’s wallet.

What we have then, at the port, is an asymmetrical position. On one hand, Pelindo II is wealthy but its functions have already been curbed, making it merely an operator.

On the other hand, the PA is very powerful, but has no money to fully execute its authority.

The head of one of the PA’s offices once said that his office had no operational budget, and gained financial assistance from Pelindo II to cover it; in implementing IT-based vessel reporting system, the Inaportnet, Pelindo II reportedly bought software made in France for the office in question.

The asymmmetrical position makes the PA prone to corrupt or — at least — unethical practices. For instance, the media reported that the above mentioned PA head was appointed as a commissioner of a subsidiary of Pelindo II.

This position placed him in a dilemma, as reflected in the instance when he had to settle a business feud between private business players and Pelindo II. Last but not least, the reported lack of competency in the agency’s personnel inflicts more complications in the PA.

To avoid turbulence at our ports, we have to reform the PA. Our choices are to give the PA enough state funding to enable it to accomplish its missions, or to dismiss the office and transfer all power back to the state-owned port company or Pelindo II.

If we cannot dissolve this problem, bad communication among stakeholders at ports will prevail. And, as one of the most important nations in the maritime world, this would definitely not be good for us.*****

Tulisan dalam koran The Jakarta Post edisi Selasa, 4 Februari 2014. Dapat juga dilhat di http://www.thejakartapost.com/news/2014/02/04/clear-ports-bad-communication-low-budgets.html

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