Transportation Minister Hatta Radjasa said his ministry was currently in the process of reorganizing the country's 1,670 ports, with some of them likely to be closed or merged in order to improve competitiveness and oversight.

"There should be a clear distinction between hub ports, national ports and regional ports in order to ensure better organization and greater efficiency. This reorganization is part of our overall reform of the maritime and shipping sector," said Hatta recently.

Hatta is concerned by the fact that there are currently some 160 ports serving international traffic without adequate supervision from the authorities, leaving the door wide open to smugglers.

"We will reduce the number of ports for oceangoing vessels to just 25. However, we have a problem with the local administrations about the plan, since most of them want to keep such ports open for reasons of local prestige," he said.

Based on a proposed revision of the relevant 2005 government regulation, ports handling international traffic will be managed by the central government via state port operators, PT Pelindo I, II, III and IV, with the local administrations restricted to managing national and regional ports.

"Following the revision of the regulation, the central government will hand over all ports handling domestic traffic this year to the local governments, provided they are willing to finance the ports' operations. However, these ports will exclude those already managed by the Pelindo companies," said Hatta.

In addition to the amended regulation, the government is also sponsoring a maritime affairs and shipping bill. Following the enactment of this bill into law, Hatta said he expected that the grounds for disputes between the central and local government over the management of international ports would be eliminated.

Under the bill, which was submitted to the House of Representatives recently, Pelindo's monopoly would be scrapped, forcing it to compete with the private sector in the hope that this would lead to improved port services.