Sea transportation sector suffers Rp 12.2t in first-half losses: ITS study

Sea transportation sector suffers Rp 12.2t in first-half losses: ITS study

Terbaiknews - A lone man disembarks a ferry on May 212020 at Merak Port in Banten. A recent study by the 10 November Institute of Technology has found that the travel ban during the Idul Fitri holiday season this year has caused Rp 12.2 trillion (US$821.9 million) in losses to the sea transportation sector. (Antara/Galih Pradipta)

A study by the 10November Institute of Technology (ITS) in Surabayashows that Indonesia"ssea transportation sector has recordedRp 12.2 trillion (US$821.9 million) in output losses in thefirst half of the year, due primarily to the drop in passengerdemand as a result of government restrictionsimposedto contain COVID-19 transmission.

The ITS study evaluatedthe impacts on the sectorfrom the Transportation Ministry’s ban on mudik (exodus) fromApril 24 to June 1 during the Idul Fitri holiday season. The ministry imposed the travel ban as part of thegovernment"s coronavirus response in an attemptto halt the disease"sspread.

Among the losses to thesector thatthe study attributed to the mudik ban are an estimated loss of Rp 862 billion forstate-owned shipping company PT Pelni andcombined losses ofRp 44 billionfor inter-island ferry companies. These include ferriesoperating the Merak-Bakauheni route between the provinces of Banten and Lampung, as well as those operating the Ketapang-Gilimanuk route between East Java and Bali.

“We’ve seen a huge decline inpassengers during the pandemic, especially at three main ferry ports and routes. On the Merak-Bakauheni route, the number of passengers dropped around 80 to 95 percent,” ITS rector Mochamad Ashari said on Tuesday,during awebinar held by the ministry.

The decline in economic activities in the transportation industryhad contributed to the 5.32 percent year-on-year (yoy) contractionin gross domestic product (GDP), according to Statistics Indonesia (BPS).

BPS data for the second quarter also show that the transportation and warehousing sectorcontracted 30.84 percent yoy, with the sea transportation sector suffering a17.48 percent yoy decline.

During the webinar, ITS researcher Ardi Adji said that the contraction in the sea transportation sector in turn caused a ripple effect in localeconomies, with the provincial economy ofBali suffering the worst blow.

“Bali is highly dependent on its tourism sector andtourist flows bysea transport. Therefore, the decline in the sectorcaused the island [province] Rp 824 billion losses inthe regional GDP, making it the worst-affected province,” Ardi said.

He suggested thatthe governmentprovide fiscal incentives for shipping lines to cushion the economic impacts of the COVID-19 health crisis.

“The government could roll out several alternativeincentivesfor sea transportation operators, such as interest subsidiesand paymentdeferrals,” he said.

Read also: Port operator Pelindo III records decline in ship traffic

Carmelita Hartoto, who chairs theIndonesian National Shipowners Association (INSA),expanded on Ardi ’s statement, sayingthat the government had stillnot responded tothe association’s request for non-tax revenue (PNBP) waivers.

“We have to cushion the severe income declinecaused by the pandemic. It’s hard to sustain our operations if the economy continues to worsen, and this could [in turn] lead to a waveof layoffs,” she said.

State-Owned Enterprises Minister Erick Thohir, who also chairs theCOVID-19 Handling and National Economic Recovery Committee, made assurancesduring the webinar thatthe government would maintainsteady distributionof its stimulus funds until next year to boost the economy.

The government has allocated Rp 695.2 trillion to stimulate the economy, focusing on healthcare, social protection and economic recovery programs. Six months into the crisis, however, it had disbursed only 34.1 percent of the funds, or around Rp 237 trillion.

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