THE 30th IAPHWORLD PORTS CONFERENCE7 - 12 May 2017Bali Nusa Dua Convention Center, Bali - Indonesia

Enabling Trade. Energizing The World

Connecting Indonesia and the World:Accelerating and Balancingthe DevelopmentRidwan Djamaluddin• Deputy for Infrastructure, Coordinating Ministry for Maritime Affairs

ridwan @maritim.go.id

Indonesia at a Glance

<20 people/km2 130

260 millionpopulation

PopulationDensityArchipelagic State 81.000 km coast lines

GDP Distribution Industrial Growth

82%“Java Centric”

Milestones in Maritime Development

1928 1945 1957 1963 1982 1985 1996 2000 2005 2014

Youth Oath

Djoeanda Declaration

Wawasan Nusantara

Proclamation of Independence

National Maritime Convention

“Sebagai negara maritim; samudra, laut, selat dan teluk adalah masa depan peradaban kita. Kita telah terlalu lama memunggungi laut, memunggungi samudera, dan memunggungi selat dan teluk. Ini saatnya kita mengembalikan semuanya,

sehingga 'Jalesveva Jayamahe', di laut justru kita jaya, sebagai semboyan kita di masa lalu bisa kembali”[Kutipan Pidato Pelantikan Presiden Jokowi, 20 Oktober 2014]

UNCLOS [1982]: Indonesia as an Archipelagic State

Convention on Maritime Continent

Department of Ocean Exploration and Fishery

Cabotage Principle

Nawacita[9 Missions]

1336

PalapaOath

Indonesia GDP Growth

7.55 7.02 7.048.10 7.63

4.98

6.89

8.766.77 7.32

9.887.93

2.25

4.19

6.98

2.46

5.884.93

5.78

7.46 7.24 6.91 6.50 6.507.54

8.22 7.82

4.70

-13.13

0.79

4.92

3.64

4.50 4.78 5.035.69 5.50

6.35 6.01

4.63

6.22 6.17 6.03 5.56 5.01 4.88 5.02

19801989 1995

20072016

2001

1998

20091982

1975

19702016

GDP Growth [%] 1970 – 2016

PDB Distribution and Economic Growth 2016

58,49%

22,03%

7,85%6,04%

2,46%

5,59%5,89%3,13%

4,29%

2,01% 7,42%

7,45%Distribution: 82%Growth: 5,25%

Distribution: 18%Growth: 4,75%

Jawa, Sumatra, Bali

Kalimantan, Sulawesi,Nusatenggara, Maluku, Papua

Economic Growth by Province 2016 Sulteng: 9,98%

Papua9,21%

Sulsel7,41%

Gorontalo6,52%

Sultra6,51%

Kalteng6,36%

Bali6,24%

Sulut6,17%

Sulbar6,03%

DKI5,85%

NTB5,82%

Malut5,77%

Maluku5,76%

Jabar5,67%

Jatim5,55%

Bengkulu5,30%

Jateng5,28%

Sumbar5,26%

Banten5,26%

Kalbar5,22%

Sumut5,18%

NTT5,18%

Lampung5,15%

DIY5,05%

Sumsel5,03%

Kepri5,03%

Papua Barat4,52%

Kalsel4,38%

Jambi4,37%

Babel4,11%

Kaltara3,75%Aceh

3,31%Riau

2,23%

Kaltim-0,38%

National: 5,02%1. Sulawesi Tengah: 9,98%34. Kalimantan Timur: - 0,38%

Indonesia Current Development Strategy

Development Strategy

Increase Competitiveness

Added Value [vs. commodity

based]

Indonesia Centric [vs. Java Centric]

• Prohibit export of raw/unprocessed commodities

• Develop SME businesses• Provide incentives

• Improve the quality of Human Resources• Create conducive investment atmosphere• Develop national logistic connectivity

• Promote development and growth outside Java

• Build and develop infrastructures outside Java

Infrastructure as the Primadona of Indonesia Development Program

3 Pillar of Acceleration

PercepatanInfrastruktur

2016

2017

2018

Infrastructure Human Resources Deregulation

Accelerate infrastructure development to strengthen quality development foundation

Accelerate infrastructure development and economy to provide job opportunities, poverty alleviation, and reduce regional development gap

Accelerate investment and infrastructure for growth and equality

More Productive Government Expenses

Rp Trilion

EducationInfra-structure

HealthEnergy Subsidy

National Strategic Projects• 243 Projects and 2 Programs• Total investment: US$ 305 billion

Road: 74

Railway: 23

Port: 10

Airport: 7

Estate: 30

Housing: 3

BondedZone: 3

Water & Sanitation: 9

Dam: 55

Irrigation: 7

ICT: 4

Smelter: 6

Energy: 12

35 GW Electricity

Aircraft Manufacture

Sumatera61 Projects

US$ 44 billion

Jawa95 Projects

US$ 73 billion

Bali & Nusa Tenggara15 Projects

US$ 0.8 billion

Kalimantan23 Projects

US$ 43 billion

Sulawesi25 Projects

US$ 13 billion

Papua13 Projects

US$ 33 billion

Region/Nation-wide: 11 Projects + 2 Programs [US$ 98 billion]

Source: KPPIP, March 2017

Ship Traffic in the World and in Indonesia

• Singapore: 33 million TEUs [2013],139.000 ship calls• Tanjung Priok 6 million, Tanjung Perak 3 million TEUs• National ship armada: 14.300 [general cargo 2.730;

tanker 840; container 279; passenger 560]

www.marinetraffic.com[31 Juli 2016]

• Global Maritime Axis• 70% of global trade in Asia Pacific Region, 45% through sea lanes• Indonesia must improve the quality and performance of its ports

Indonesia Geostrategic Position

Average depth of ports in Indonesia: 8 meters [500 TEUs Containers]To lower the logistic cost by 50%, the depth must be at least 12 meter [3.000 TEUs]

Indonesia

Tanjung PriokTanjung Perak

BatamTarget Indonesia

Port KlangTanjung PelepasPort of Singapore

Deep–Sea Port Development

Kuala Tanjung27 Januari 2015

Teluk LamongBeroperasi 2015

Makassar New Port Mei 2015

Tanjung Priok II [2014 – 2040]

KEK SorongJune 2016

Map of New Port Development andPort Capacity Improvement Project

Kuala TanjungBitung

Maloy

CikarangBekasi Laut

Patimban

Sorong

KalibaruMakassar New Port

Kijing

Kupang

• 15 New Airports

• Upgrading 9 Cargo Airports

• Upgrading 25 Airports in outermost and

disaster-prone areas

Connecting Indonesian Archipelago

• 5 Deep-sea Ports: Kuala Tanjung, TanjungPriok, Tanjung Perakm, Makassar, Bitung

• 19 Feeder Ports• 100 sub-feeder ports

1.15

6.22 4.50

1.83

13.71

Pelindo I Pelindo II Pelindo IIIPelindo IV Total

Container Traffic (Million TEUs)

8%

45%33%

13%

Container Throughput Percentage

Pelindo I Pelindo II Pelindo III Pelindo IV

Container Traffic in Indonesia

Transportation Cost and Logistic Costin Indonesia

15.3

13.7

15.6

11.7

14.1

4.9

0

2

4

6

8

10

12

14

16

18

Jabotabek Surabaya Medan Makasar Rata-RataIndonesia

Jepang

Logistics Cost to GDP Transportation costsTo Total Cost [%]

6.5

4.94.2

3.56 3.773.2 3.04

3.63

2013 2014 2015 2016 17-Jan 17-Feb 17-Mar 17-Apr

Dwelling Time [days]

The distance from Jakarta seems to be "closer" to Singapore than to Padang or Jayapura

The High Cost of Domestic Shipping

TransportINDES LINESINDES LINESTrans Transport

SeaPort

SeaPort

Shipper ConsigneeTransfer Transfer

Port to Port

Door to Door [Rp 8 juta/20 ft]

20 ft. Container Jakarta – Bitung[A+B] = Rp 4 million [50%][C+D] = Rp 2,5 million [30%]E = Rp 1,5 million [20%]

B AED

GateGate

C

Transportation Cost Structure Jakarta – Bitung

20 ft. Container shipping costJakarta – Padang: Rp 7,5 million

Jakarta – Jayapura: Rp 25 millionJakarta – Shanghai: Rp 4,5 million

Source: Yusmar Anggadinata, 2011

Now Hub & SpokeDwelling Time 4 – 5 hari 2 – 3 hariThroughput 4 million TEUS per year 8 million TEUSLand transportation Heavy traffic ~ 30% less

Fuel consumption ~ Rp 190 billion/year lessRoad maintenance ~ 30% less

Hub and Spoke: Dry Port Development

Short Sea Shipping in The National Logistic System [Sislognas]

Short Sea Shipping Moving at least 30% overland transport goods that have been overloaded to sea transportation through the following programs::

1. Short Sea Shipping or Coastal Shipping in Jawa and Sumatra islands as well as others by mapping the sea lanes that may be served by short sea shipping support vessels throughout Indonesia.

Sources: Ministry of Transportation RI

2. Setting a special rate for short sea shipping port in Indonesia. In the early stages, prepared ports in Marunda, Semarang, Surabaya, and Lampung.

2. Opening and maximizing railway tracks to and from ports and accelerating the completion of double track projects on the island of Java, both north and south.

“Sea Toll” Program

• Maintaining the availability, accessibility, and affordability of the basic needs in the outermost, remote, and least developed islands

• Government provides subsidies to transportation and logistic costs

• Multimodal transportation: sea, air, land, river

• Synergized efforts by State-Owned Enterprises in providing logistic centers in ~30 remote locations

Development from the Periphery

• Developing Integrated Marine and Fishery Centers in the border and small-outermost islands

• Natuna | Simeulue | Tahuna | Timika | Nunukan | Biak Numfor | Tual | Mentawai | Rote Ndao | Merauke | Sarmi | Moa | Talaud | Saumlaki | Morotai

Integrated Marine and Fishery Centers

Palau

Australia

Hawaii

Export Destination

14 Industrial Zones Outside Java

Kuala TanjungAlumina, CPO

Sei MangkeiCPO Processing

TanggamusMaritime, Logistics

Gulf of BintuniOil & Gas, Fertilizer

BuliFerronickel,

Stainless Steel Smelter

BitungAgroindustrc

, Logistics

PaluRattan, Rubber, Cacao, Smelter

MorowaliFerronickel,

[downstream] Stainless

Steel Smelter

KonaweFerronickel,

[downstream] Stainless

Steel Smelter

BantaengFerronickel,

[downstream] Stainless

Steel Smelter

BatulicinIron, Steel

JorongDownstream

Minerals [Bauxite], CPO

KetapangAlumina

LandakRubber,

CPO

Catch Fishery1% Aquaculture

16%

Fish Processing Industry

7%

Biotech Industry14%

Mining and Energy16%

Marine Tourism 4%

Sea Transportation 2%

Maritime Service Industry

15%

Small Islands9%

Mangrove1%

Non-Conventional Energy Resources

15%

US$ 210Billion/year

US$ 180

US$ 210US$ 200

US$ 200

US$ 120 US$ 100

US$ 60US$ 30

US$ 8US$ 12

Maritime Economic Potentials

BPS, 2015

Indonesia Maritime Economic Potentials US$ 1,33 triliun per Year

Presidential Regulation No. 16/20177 Pillars of National Ocean Policy

National Ocean Policy

Marine Resource Management and Human Resource Development

Defense, Security, Law Enforcement, and

Safety at Seas

Marine Organization and Management

Economy, Infrastructure, and Social Welfare

Maritime Diplomacy

Maritime Culture

Marine Zonation and Environmental Protection

THE 30th IAPH WORLD PORTS CONFERENCE7 - 12 May 2017, Bali Nusa Dua Convention Center, Bali - Indonesia

Thank You