Indonesian Arab Investment Blog

“This is to boost our export and import activities,” he said.

The four ports are Tanjung Priok in North Jakarta, Belawan in Medan, North Sumatra, Tanjung Perak in Surabaya, East Java and Soekarno-Hatta in Makassar, South Sulawesi.

The move comes after the Indonesian Chamber of Commerce and Industry (Kadin) and other business organizations called for working hours to be extended at the country’s ports earlier this month.

Operations at the four ports would be open not only for ship docking but also for customs and immigration activities, Freddy said. “This way, if a cargo ship arrives at 2 a.m., it can immediately be served,” he said, adding that it could also avoid vessels from docking for too long as a result of delays.

Freddy said he hoped service would be improved if ports were open for 24 hours.

Sunaryo, director general of maritime transportation at the Transportation Ministry, said the infrastructure to open the seaports around the clock was adequate.

“All we have to do is coordinate with customs,” he said.

The hardest part would be to provide 24-hour manpower to load and unload vessels, Sunaryo said. “That should be synchronized with the Manpower Ministry,” he said.

On the other hand, Sunaryo said, the Transportation Ministry’s initiative could create more jobs, especially for people living near the ports.

The plan is currently in a test phase and would be officially implemented next January, Freddy said.

Richard J Lino, chairman of state-owned port operator PT Pelindo II, said it would take a long time to get all relevant agencies, including customs, immigration, and quarantine services, to coordinate their work activities at the seaports.

“They need time to adjust,” he said.

The government also wants to establish an international-standard port in Indonesia to function as hub port for the wider region.

PT Pelindo II has been pushing for Tanjung Priok to be that port. Lino said he hoped Tanjung Priok would be ready to operate as an international hub port by 2014.

Renovating the port, he said, would take five years and cost up to Rp 7 trillion ($749 million).

An archipelago of more than 17,000 islands, Indonesia relies heavily on sea transportation. Millions of people and tons of cargo are delivered every day using big vessels and small ships.

Pelindo II manages ports across Indonesia, including in Banten, Palembang in South Sumatra as well as Teluk Bayur seaport in West Sumatra, and Sunda Kelapa port in North Jakarta.

"We plan to spend $100 million in capital expenditure in 2010 to buy more planes as well as to fulfill Garuda's other operational expenditure," Garuda finance director Eddy Purwanto told reporters on Monday.

He said Garuda still requires yet more capital to improve its infrastructure to provide its passengers with wider and better services.

If it manages to achieve this expenditure target , then it will be the third time the airline spent has $100 million in capital expenditure or more in one year,. It also spent over $100 million on capital expenditure in 2008.

The 2009 capital expenditure (so far) used in part to purchase new Airbus aircraft from Toulouse in south western France and from Boeing in Seattle in the United States.

Next year's proposed spending will be part of the airline's ambitious five-year expansion program to make it not only the largest airline in the country, but also one that can compete with its regional rivals.

On Monday, Garuda received one new Airbus 330-200 and one new Boeing 737-800.

Garuda has ordered 10 new Boeing 777-300ERs and 50 Boeing 737-800s. Previously, the company has received three Airbus 330-200s and one Boeing 737-800.

"Until today, we have about 67 aircraft. So, by 2014 we will be targeting to have at least 116 aircraft," Garuda president director Emirsyah Satar said, adding that the expansion program called for the modernization and revitalization of the Garuda aircraft fleet.

With this larger fleet, Garuda will be able to strengthen and expand it regional presence, flying more routes and with greater flight frequency.

"We will increase our routes and our increase the number of flights from 1,700 times per week in 2009 to 3,000 times per week in 2014," Emisyah said.

He said that the company was targeting to serve 27 million passengers by 2014, up from 10.1 million passengers recorded in 2008.

Emirsyah is confident the company would be able to achieve its operational targets and make Rp 3.75 trillion ($397.5 million) in profits by 2014.

In 2008, the airline booked Rp 669 billion in profits, out of total revenue of Rp 19.4 trillion.

For this year, Garuda has set a minimum 10 percent growth target for net profits compared to a year earlier. In the first half of this year, net profits stood at Rp 612 billion.

The company is now preparing to sell 40 percent of its stake though an initial public offering (IPO) next year (in 2010), in a process Garuda expects to bring in $300 million to $400 million in proceeds.

"Our target is still on these figures," he said.

The planned IPO is part of a debt restructuring agreement between the company and its creditor Bank Mandiri to settle a previously unpaid debt of about $100 million.