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The government will prioritize the development of port and
railway infrastructure this year to ease the flow of goods and reduce
high transportation costs in the country, a minister says.
"Our priority is to reduce bottlenecks in ports and railways, including
at Tanjung Priok port, and railways on Java island," Transportation
Minister Jusman Syafii Djamal said after a meeting with economic
ministers on Friday.
Among development plans for this year, he said, was the modernization
of navigation systems in three international airports: Kuala Namu
airport in Medan, Lombok airport in Lombok and Hasanuddin airport in
Makassar.
He also said the ministry would develop ports designed to load crude
palm oil (CPO) as the commodity had become the country's main export.
In the first quarter of 2008, CPO was the major contributor to the rise
in the country's non-oil-and-gas exports, which increased 47 percent to
$4.4 billion compared to in the same period last year.
To help secure domestic distribution, Jusman said the ministry would
fast track permit issuance for coal railway transportation projects to
help secure distribution, particularly to state power plants.
"For port and railway projects under development by coal producers, we
will speed-up permit issuance," Jusman said.
The ministry stated its budget this year was reduced to Rp 14.11
trillion (US$1.53 billion) after a 7.76 percent cut aimed to reduce
state expenditures in response to a surge in global oil prices.
The Finance Ministry has cut the budget allocation to all government
offices by a maximum 10 percent to safeguard the state budget, which is
burdened by oil subsidies.
Despite the cut, Jusman said the ministry would try to improve the
country's transportation system, including by restoring trains and
modernizing navigation systems.
He also said the country's transportation and logistics systems needed
to be integrated so the ministry could design a complete, multi-year
infrastructure development strategy.
"Our transportation and logistics systems must be integrated. The
Transportation Ministry will design a master plan to rebuild the
country's ports, airports and railways to support logistics," he said.
The Indonesian Chamber of Commerce and Industry has repeatedly said
inferior infrastructure would result in increased product prices and
burdened customers.
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