The Brand New Sea Toll Policy in Indonesia

Chapter 1

Introduction

1.1 Background of Study

Indonesia is an archipelago country. A country with 1.910.931,32 km² of land area

and 3.544.743,9 km² of sea area including the area of exclusive economic zone. Which mean
the sea area of Indonesia is around 65% if compared with the total area of Indonesia territory.
If we think with the logical thinking, the main sector of Indonesia economic source should
come from the maritime sector.

Few years ago, all Indonesia leaders and government only focus in developing
Indonesia from the land area sector, for the example in developing road, rail, and etcetera. No
one concern at Indonesia’s sea area that clearly bigger than the land area sector itself. They
forgot about the equalization of developing in every region and area in Indonesia. This case
can’t be success if only using the land area sector. It will conduct more time, energy, and also
money. As an example is there are many island in Indonesia separated by water, it’s mean
that Indonesia need many transportations that can travel to any region in Indonesia.

Sea transportation is the answer, until nowadays there are no other transportation that
more efficient than sea transportation. If comparing between sea transportation and air
transportation, sea transportation efficiency is higher than air transportation compared by the
cost and the cargo loaded in the transportation, for example between ship and airplane. From
this comparison, the government should improve all the infrastructures that related with sea
transportation, in this case are related to the infrastructures when ships sailed and when the
ships docked.

Last year, the government of Indonesia finally launched a policy that may improve the
maritime and sea transportation sector, it’s called as the sea toll road transportation program.
This program is a policy that made by President Joko Widodo to advance the Indonesia
economy from maritime sector. And also, this policy expected to equalized the economy
sector in all over Indonesia region. Its means, there are no difference economic degree
between people in Jakarta and people in Jayapura.
1.2 Problem Statement
1. What is sea toll road transportation program?
2. What is sea toll policy?
3. Why is it important that sea toll policy is realized?
4. What are the advantages of having sea toll policy?
5. What are the weakness of having sea toll policy?
6. How is sea toll policy realized?
7. How can this sea toll policy be maximized?

1.3 Purpose of Study

1. To explain the definition of sea toll road transportation program
2. To explain the definition of sea toll policy
3. To clarify why the sea toll policy important to realize
4. To explain the advantages of the sea toll policy
5. To explain the weakness of the sea toll policy
6. To explain the ways to realize the sea toll policy
7. To explain the ways to maximized the sea toll policy

1.4 Contribution of Study

 This policy will be useful for the maritime sector knowledge surely with the
collaboration of government side, it can be implemented to increase the development
of economic sector prevalent in any region.
 Surely it’s very useful for all Indonesia people due to increasing the economic sector.
 Chapter 2

Sea Toll Policy and Its Importance

Sea toll policy definitely will be very useful for all Indonesian people. This case will
be discussed below, contained of the definition of sea toll, the definition of sea toll policy, the
importance of realizing sea toll policy, the advantages, and the weakness of this sea toll
policy itself.

2.1 The Definition of Sea Toll

Few months before, The Indonesia government already realized a policy called Sea
Toll Program. There are such a bunch of news in television that discuss and also debating
about the pro and the contra of this Sea Toll Program. Some projects that realized this policy
also already run by the government that collaborate with some State Owned Enterprises and
Private Companies. Hopefully our government doesn’t involve with the Foreign Private
Companies too much. It will become more profitable for their companies, they only leaving
out the rest profit for Indonesian people. Before discussing about whole of this Sea Toll
policy, it’s better to recognize about the sea toll itself.

 Sea toll definition by which creates

Sea toll is a transport of sea logistic concept that initiated by Indonesia President, Mr.
Joko Widodo. According to Mr. Joko Widodo, the purpose of this program is to connect the
ports (big ports and small ports) in Republic of Indonesia. With the connection between those
sea ports, it will create the efficient continuity in goods or logistics distribution to all of
Republic of Indonesia region. The economic in maritime sector also will be accelerate due to
the infrastructures upgrading program that required for the sea toll.

There also the connection that integrate from one ship to another ship, this is called
logistic supply chain system. Not like the toll road that we’ve known in the land area. So,
with this Sea Toll Program, the logistic supply chain system will be efficient. When the big
ship arrived at the big port to do the logistic distribution, the other small ships around could
help to distribute the logistic to the isolated region. If this program doesn’t realize, all of the
logistic from the big port will only distributed by the land transportation that may conduct
more energy, time, and money for upgrading the infrastructures needed in the isolated region.

So, not only the big ships that will be accommodated with the good infrastructure, but
also the infrastructure that accommodated the small ships also should be upgraded. After the
big ships unloading the logistic in the big port, furthermore the logistic will be distributed by
land transportation to the reached region, it also transferring the logistic to the small ships
that will distribute to the isolated region. And then, after the small ships unloading the
logistic in the isolated region, it will load the goods from the isolated area itself. That goods
or logistic also will be distributed to another region in Indonesia. In the end, the supply chain
system in distributing logistic will be run effectively as Indonesian people wish.

2.2 The Definition of Sea Toll Policy

This sea toll concept need Sea Toll policy due to the sea toll program can be done and
become useful for all Indonesian people. According to the expert, policy is a projected program
of goals values and practices (Laswel,1970), a purposive course of problem or matter of concern
(Anderson,1979). According to KBBI, policy is a series of concepts and principles that became the
basis of the lines and in the implementation of the work plan, leadership, and how to act. Sea toll is a
transport of sea logistic concept that has purpose to connect the ports (big ports and small
ports) in Republic of Indonesia (Jokowi,2014). So, Sea Toll policy is projected program and
steps to realize the sea logistic concept.

The policy that should be made by Indonesian government must be stand in

Indonesia, not to the foreigners. It means the policy should be profitable for Indonesia and
didn’t harm for the foreigners. Such a wasteful if the policy that made by the government is
more profitable for the foreigners, in this case Indonesia will become the side that takes more
loss.

Our government will execute the programs that will support the sea toll program.
Because of that, the government need to create the policy that contain the fiscal and non
fiscal intensive for the purpose of facilitate the execution of the supporting program. The
policy will be made by the government will cover several sectors such as the regulation of the
distribution of goods, sea port and ship infrastructure and maritime industries, folk shipping
and short sea shipping.
  Regulation of the distribution of goods

For the regulation of distribution of goods, our goverment will use the application of
cabotage principle. The cabotage principle is a principle which is the process of transporting
logistic in Indonesia must use the ships with Indonesian flag on it. The application of
cabotage principle in Indonesia is in form of that the unloading and loading logistic of the
foreign ships should only be done in the international sea port. The international sea port that
already chosen by the government are Kuala Tanjung and Bitung sea port. After that, the
logistic should be transferred to Indonesia domestic ship and transported by those domestic
ship to the region that already intended. The application of this policy will trigger the
development at Indonesia maritime sector, especially in shipping industries.

 Regulation of sea port and ship infrastructure

Sea port and ship infrastructure is the most important things that decide sea toll policy
will be realized or not. To realize sea toll policy, the building up and upgrading the sea port
and ship infrastructure must be realized first. The government give the fiscal intensive in the
form of fund, and non fiscal intensive in the form of the easiness in tax administration. Both
of them will support the realization of sea toll.

 Regulation of folk shipping

Folk Shipping is the people shipping enterprise that usually using the wooden ship. In
this sector, the government will make an affirmative policy due to the continuance of the folk
shipping in the form of the sharing of the state budget, sharing the bulog and industry
commodity, the fuel subsidy, the facilitate of banking, the assistance in design technic and the
construction of a wooden ship, the material of the ship, and the provision of petrol stations.

 Regulation of short sea shipping

The implementation of the short sea shipping using Ro-ro ship. The short sea shipping
will be the alternative in distributing the logistic, decreasing the road density, saving the fuel
and decreasing the gas emission, and also decreasing the road accident. This program needed
a new government policy in the form of the ship fuel subsidy, decreasing the bunker cost,
incentive on upgrading sea port and shipyard, and also discharging the tax for the tool that
related to shipping industries.
2.3 The Sea Toll Policy is Important to Realize

Geographically Indonesia is an archipelago with two-thirds of the oceans is greater

than the mainland. This can be seen by the shoreline in almost every island in Indonesia (±
81,000 km), which makes Indonesia ranks second after Canada as a country that has the
longest coastline in the world. Strength is what is the great potential to improve the economy
of Indonesia.

 Most important nation’s problem

During this nation's problems are often raised issue is development in this country is
uneven. No region is so high degree of economic progress, and there are areas that are very
behind. Even in the last two Government had established a special ministry to deal with this
problem even though the result was less than the maximum. Cause of the photo Equitable
Development is because this country is an archipelago where the distance between one island
to island so far. Transport costs are very high. This is what causes the prices of goods or
commodity prices between the island and other islands become much different. Maybe
everyone already knows that in eastern Indonesia such as Papua and Maluku prices of some
commodities could reach twice the price in Java. Especially in remote areas of Papua and
other regions where the price of cement as a building material as far as Ane achieve price
above Rp. 300,000 rupiahs per sack. Incidentally Ane brother was staying in Jayapura and
provide information about it. He even said to Fitri and Christmas last year, the price of a jar
of cake Lebaran / Christmas in Greater Jakarta around Rp. 40,000 per jar, in Jayapura cost
not less than Rp. 300,000 per jar.

All this because of one thing: the high cost of regular transport imposed on such
important commodities. And this is the root of the problem to be solved central government.
And perhaps one solution is Marine Highway that stretches from Sumatra to Papua. Sea toll
is not a highway that consists of long bridges connecting the islands, not underwater roads
that connect the islands.

 Mature concept from Sea Toll

Sea Toll in question is a large fleet of ships simultaneously sailed from the island of
Sumatra stop in the islands of Borneo, Java, Sulawesi, Maluku, Papua and back up again by
the same route on an ongoing basis. Whereas in the past had been a ship sailing towards
Indonesia East usually ship owner or the ship must take into account the company's profit so
based on what items are loaded into the ship. If it was not / is not full, the cargo ship will not
leave for fear of losing points. But with 'Toll of the Sea' These ships will always depart as
schedule so it will create a 'path' very long from Sumatra to Papua. It may also be described
as a giant empty goods train and each time moving from West to East and vice versa. With
the empty freight train is ready to take a range of commodities and drove from West to East
or vice versa, then the economic actors will utilize it optimally for their business interests.
When more and more economic agents who use the toll is in addition to Sea Train. This item
will also become the main transport of small communities, then you can imagine Railway
Goods business will benefit from adequate so as to cover the needs of the operational costs.
And one of the targets to be achieved by this program is the reduced cost of transportation of
various commodities/ goods for society. And when it reached then Equitable Development
Program of the central government will be realized gradually and focus.

Sea Toll concept is suitable for Indonesia which is mostly covered are aquatic and
have 17,500 large and small islands. However, realizing the sea motorway concept is not only
to build the port, but also must be accompanied by improvement of the national marine
transportation system as a whole. If only build ports, without fixing the existing
transportation system, the marine highway system launched by President Jokowi would be
difficult to be realized. Implementation sea toll should be supported by increased capacity
and productivity of existing ports to speed up the flow of goods in and out of the harbor. The
low productivity of ports in Indonesia can be seen from the length of time loading and
unloading goods (dwelling time) at Tanjung Priok port which last year reached 5.2 days or
longer than dwelling time in the port of Malaysia and Singapore.

2.4 The Advantages of Sea Toll Policy

About sea toll, it has some advantages if it applied in Indonesia. Those advantages are
shown below:

 Decreasing the dwelling time

It can decrease the dwelling time in some main harbor from 6 – 7 days become 3 – 4 days.
Dwelling time is when the container unloaded until loaded goods and go to sails from the
harbor. About dwelling time, Indonesia have long duration of dwelling time than another
ASEAN country for example Indonesia need 4 – 5 days for dwelling time but in Thailand and
Vietnam need 2 – 3 days, even Malaysia have 1 – 2 days for dwelling time. The duration of
dwelling time is caused by custom and clearance in the harbor so dwelling time can calculate
the quality of the harbor operator. In Indonesia there are 3 step for dwelling time, first is pre-
clearance (time that unloaded goods from container), then customs clearance (time that
needed to get an agreement from customs about releasing goods from harbor) and post-
clearance. If Indonesia have short duration of dwelling time, it can make ships easily sails
and deliver goods to the destination especially in East Indonesia.

 Decreasing the delivering cost

From short duration of dwelling time can make another affect or advantages from sea
toll there are the cost to deliver goods with sea transportation can be decreased, so the
primary needs in East Indonesia can be fulfilled. It can be happened if the schedule when
ships go to sails set regularly, ships are sails and arrived exactly so sea transportation system
can run efficiently. But in case, the schedule isn’t set regularly and it can make the logistic
cost can be increased. That case make in delivering goods uncontrollable. Then cost primary
needs in East Indonesia increased so they can’t live happily.

 Increasing and upgrading infrastructures

Then, it could increase and upgrade the infrastructures outside Java example in Papua,
Kalimantan and etc. With short duration dwelling time, means ships can be easily unloaded
and loaded goods. So with this, many goods have been deliver to outside Java. If in some
place has one kind of goods with large number, it is can decrease the cost of that goods. If the
cost is decreased the infrastructure is can grow easily. For example, before sea toll applied is
the cost of one sack cement in java around fifty thousand rupiahs, but in outside java is
around one hundred thousand rupiahs per sack. And now if sea toll has applied in Indonesia
the cost is almost same between java and outside java.

 Increasing the national sailing fleet

Then, it also increased the national sailing fleet with make ships in large number to
support this policy. With short duration of dwelling time and also large number of sailing
fleet can make the realization of sea toll easily. The government must have a project with
many dock in Indonesia for make ships. And also this policy can make job vacancy for
Indonesian people especially alumnus of naval architecture and shipbuilding engineering.
Then the government can minimize unemployment in Indonesia.

 Renewing old ship before

 And, the changed of using 70% of old ships become using 50 % of old ships. It
means, with increase national sailing fleet, the government make or buy some new ships to
renew the old one. This way can minimize some disaster caused by old ships aren’t suitable
to be used, example the old ship can sink caused by mid ship is broken in the middle of way
to deliver goods and when the ships sails to deliver the goods, can be constrained any damage
to the ships. But this is difficult to applied, because Indonesia need more cost to buy or make
some ships to support sea toll policy.

So, this policy has big effect to the economy of Indonesia, especially for decreasing of
national logistic cost but for applied this policy also need large number of cost too.

2.5 The Weaknesses of Sea Toll Policy

If there are the advantages of that policy, of course there are some weaknesses in
realizing this sea toll policy. The weaknesses are:

 The ship should sail depend on the schedule even though the cargo didn’t full yet

One of them is the shipping company may get loss when transporting the logistic
depend on the schedule. In order to make the shipping route systematic, the ships should sail
even though the logistic doesn’t full in the ships. This may cause the shipping company get
loss when the logistic producers didn’t produce the goods as many as usual. It means that the
logistic quantity that would be transport not exceeding the target as expected before.

 The various type of container packaging will confuse the employee of sea port

But, if the logistic quantity is too exceeding the target expected, this may cause
problem too. If this policy realized, the producer will encourage to produce more goods than
before. More goods that they will sell, more profit also will come to them. Some new
producers will be established, due to more easy for them to sell and spread their product in
any region. The problem that may cause is too much containers will deposit in the sea port.
The containers packaging that deposit in the sea port also varies, that may confuse the
employee while transferring the containers depend on its route. So, the government should
encourage the producers of goods to package their product with the similarity of container’s
packaging according to the standard specified.
  To much involving the foreign companies due to upgrading the infrastructures
needed

To support this sea toll program, the government already ordered few ships for
increasing the transportation unit. Unfortunately, our government doesn’t delegate our own
shipyard company to building up some new ships. Only a few shipyards that owned by our
nation involved in this project. The rest shipyard companies are owned by foreigners. It will
much profitable for them although the purpose of the project is to advance the economic
growth of our own nation.

 Reducing the profit in exporting goods

In this sea toll project, already planned that the international shipping should only lean
in Kuala Tanjung or Bitung sea port. This step maybe doesn’t profitable due to exporting our
Indonesia’s products to the international market. The producers that want to trade their
products in the international market should transfer their products to the sea port that traveled
by the international shipping, in Kuala Tanjung or Bitung sea port. This regulation will cause
the producers more fund in trading their products outside of our country.

 The corruption culture practice

The last thing, is the main problem that usually happen by mostly Indonesian people
that in charge on a few important position. The problem is corruption. Because this policy
will involve more than billions rupiah, corruption may cause in some sectors. The final effect
is the product of this policy wouldn’t happen as the design before, as all Indonesian people
wish. The deep observation should be done by our government in every part of upgrading
entire infrastructures needed in this sea toll program.

The Comparison Between Advantages and Weaknesses of Sea Toll Policy

No. The Advantages of Sea Toll Policy The Weaknesses of Sea Toll Policy

1. Decreasing the dwelling time The ship should sail even the cargo didn’t

full
2. Decreasing the delivering cost The various type of container packaging

3. Increasing and upgrading infrastructures The corruption culture practice

4. Increasing the national sailing fleet Reducing the profit in exporting goods

5. Renewing the old ship before To much involving the foreign companies

Chapter 3

The Process to Realize Sea Toll Policy

Due to the importance of realizing sea toll policy, there are some ways to realize and
maximize this policy. Those ways are discussed below.

3.1 The Ways to Realize Sea Toll Policy

The way to realize the sea toll is explained below coherently from first step to the last,
those few steps are:

 The provision of funds

The main way to realize the sea toll policy is from the infrastructures sector. It’s
definitely need a bunch of fund. The fund can be covered from our government subsidy that
already prepared for this policy. That subsidy used as the cost for upgrading the
infrastructures that related to the policy itself. The main infrastructure that must be upgraded
is such as the sea port and also the ships unit.

 The upgrading of infrastructures

Start from the sea port infrastructures. Sea port definitely is the main infrastructures
that must be upgraded due to this sea toll program. The place for the ships lean, loading and
unloading logistic that bought by the ship as a mean to moving the transportation channel
from the sea track way become landline track or conversely. The main reason in this sea toll
program is the dwelling time, or the waiting period of loading and unloading logistic in the
sea port. Dwelling time also become the root problem of the goods price gap in the isolated
region in Indonesia. Dwelling time cause by the stacking of transportation units or logistic
that will be unloaded in a sea port. That’s happen because of the lack of another sea port that
have the equal infrastructure compared by those big sea port in terms of loading and
unloading logistic from the ships unit.

The first point of the infrastructure that must be fulfill is the deep sea port. Of course
the sea port must have the deep tide, it is a must because soon the sea port will be lean by the
big ships with the huge loading too. If the sea toll program is realized, the construction of the
deep sea port must be established to support the big ships that bring the logistic through the
route from Sabang until Merauke.

The second point is the upgrading of the sea ports that potential and included into the
sea toll route, so those sea port will fit the requirement to be lean by the big ships that bring
logistic to any region of Indonesia. In this case, still connected with the first point, it is the
upgrading those sea port become the deep sea port. One of the way is by dredging in the
bottom part of the tide that shallow become deep enough as the requirement needed, so the
big ships may lean on those sea port.

The third point is developing the infrastructure in the sea port, in this case is the sea
port area expansion. The main focus is upgrading the container terminal that used as the
transfer point of logistic from the ship to the land area. The logic is, more area that available,
more loads that man be moved. And also, the ships didn’t need to queue up to do the loading
and unloading logistic activity.

The fourth point is developing all entire another infrastructure in case of the service
that help the ship lean and also for the comfort and safety factor inside the sea port itself.
Because of the huge intensity of the ships that come and leave, surely the service that called
by the ships parking attendants will be used more often. The comfort and safety factor of the
people inside the sea port also need to be noticed, as an example is the cleanliness of the
public toilet and food cafeteria in the sea port.

After the sea port sector already upgraded, the next is the sum of ships unit that will
sailing to entire Indonesia region. In the new publication, the Ministry of Transportation of
Indonesia has been ordered around 39 big ships that involved over 17 shipyards. As soon as
possible, they also will order around 5 ships that may transport the livestock cargo. This step
that already done by the government is very correct. It will also help the shipyard crisis
problem that already less of ordered since few years ago.

But, the quality of those ships should be maintain during the production and also after
the ships already made up. The ships that have to made up is the bigs ship with the big
efficiency also. The loading cargo area must be large and didn’t leave to much space that
unused. The material that used also must be the best one in it class. It is feared, because this
project involved the huge amount of money, many people from the shipyard blinded. They
only thinking about the big profit, so the amount of cost that already devoted for the
construction diluted slowly. As the consequence of that, the shipyard will choose another
material that have the lower quality if compared by the design before. So, this problem may
not appear to the surface. The government should control the production of the ships with the
expert’s help.

Beside the big ships units, the small ships that the controlled by the Folk Shipping
that involved the people of Indonesia itself should be added. This shipping helps to distribute
the logistic from the big ships to the small region that the big ships may not lean. It also will
upgrade the economic sector for the small people too.

 The establishment of new route

And the last is increase more route that reach all entire Indonesia region. It can be
help by the Folk Shipping above if the region is too isolated. The new route that already
operate few months ago are: First, Tanjung Perak – Tual – Fak Fak – Kaimana – Timika –
Fak Fak - Tual – Tanjung Perak, this routed served by KM Caraka Jaya Niaga III-32. Second,
Tanjung Priok – Biak – Serui – Nabire – Wasior – Manokwari – Wasior – Nabire – Serui –
Biak – Tanjung Priok, served by KM Caraka Jaya Niaga III-22. And the third, Tanjung Priok
– Kijang – Natuna – Kijang – Tanjung Priok, that served by KM Caraka Jaya Niaga III-4.
Surely, another variation of routed should be established in the future in order to reach all
entire Indonesia region.

 The diagram of process

3.2 The Ways to Maximize Sea Toll Policy

There are such a bunch of things that we could do in ordered to maximize the
realization of sea toll program. From the government side, much supporting policy can be
made due to maximize and accelerate the realization of sea toll program. Actually in those
supporting policy actualization.

 Funds is available in every terms of condition

First, the funds that needed the process of the realization of the policy, should be
available in every terms of condition. But, those funds should not offend the other funding
that already allocated for another economic sector. By reducing some subsidy in the few
sector outside the economic sector, this reduction may sustain the funding process that
needed in case to realize the sea toll program.

 The equalization of upgrading infrastructures

Second, the equalization of upgrading and developing all infrastructures that needed
for the policy. If the manufacture of those infrastructures is done together and of course
quickly, certainly the policy can be total in the realization. Especially in resolving the
dwelling time issue. The revamping of port should be done quickly. Expansion of area and
the upgrading of equipment, especially crane would be very helpful due to the continuity of
loading and unloading logistic process, so the dwelling time in Indonesia can be cut
significantly than before.

 The round trip route must be established

And also, the route that established in the future must be defined with the round trip.
The ships transport logistic from one are to another area. After that, it’s doing the loading and
the unloading process. Then, the ship transport the goods from that another area back to the
area before. This supporting program should be done due to the efficiency purpose, because
the ships need a lot of fuel to sail. After this supporting program implemented, there will be
no extravagance in using the fuel.

 The diagram of process

Equalization Round Trip

Availability of Maximize The
of Route
Funds Realization
Infrastuctures Establishment