President Assigns PT Pelni to Provide Pioneer Service to Underdeveloped & Remote Areas

Considering to connect underdeveloped, remote, outermost, and frontier areas  with developing and developed areas, the Government needs pioneer shipping. Therefore, President Joko Widodo on 8 January 2016 signed a Presidential Regulation Number 2 of 2016 on the Implementation of Public Services on State-Owned Pioneer Shipping.

In the regulation, in order to provide services to the people, the Government assigned state-owned shipping company PT Pelni to provide public services in a form of pioneer shipping services. Pioneer shipping as intended aims to serve underdeveloped and/or remote areas.

“Pioneer shipping as intended is carried out by using state-owned pioneer ships, according to the provision of the Law,” Article 3 paragraphs (1, 2) of the Presidential Regulation says.

The Regulation stressed on the obligation to implement public services for pioneer shipping activities in order to: a. Connect underdeveloped, remote and/or frontier areas with developing or developed areas; b. Connect areas which have few transportation modes; and c. Connect areas which unfavorable to be served with sea activities, transportation for river and lake; or ferry.

Pioneer shipping activities for underdeveloped, remote and/or frontier areas as intended are determined based on several criterias, among others: a. Not in service range of sea transportation activities, transportation for river and lake or ferry which are regularly operated; b. Unfavorable in commercial point of view; or c. The population has low income.

The budget needed in the assignment of public service obligations implementation as intended is allocated from the State Budget (APBN) of the Ministry of Transportation,” Article 5 paragraph 1 of the Presidential Regulation Number 2 of 2016 says.

Meanwhile, the following paragraph stated that all budgets which are used by state-owned shipping company PT Pelni to the assignment must be verified by the Ministry of Transportation.

New Contract

The Presidential Regulation also asserted that budget allocation for the public service obligations implementation in the pioneer shipping activities which has been stipulated in the APBN is used as the basis to make another contract with state-owned enterprises (BUMNs) on sea transportation which will implement the pioneer shipping service activities.

“The contract with state-owned enterprises (BUMNs) on sea transportation will be signed soon after the signing of Budget Implementation Entry List (DIPA),” article 7 paragraph 2 of the Presidential Regulation says.

According to the Presidential Regulation, further provisions on the implementation of state-owned pioneer ship service activities shall be regulated by the Minister Regulation.

“The Presidential Regulation come into effect as of the date of its promulgation,” Article 9 of the Presidential Regulation Number 2 of 2016  which is promulgated by Minister of  Law and Human Rights Yasonna H. Laoly on 12 January 2016 says.

 (PUSDATIN/ES) (RAS/MMD/YM/Naster)