GENERAL SANTOS CITY(MindaNews/10 September)— Direct trade exchange between Mindanao and North Sulawesi in Indonesia remains stalled due to the lack of cargo vessel to service the shipping lane.
Rey Billena, Philippine Chamber of Commerce and Industry governor for Southwestern Mindanao, revealed that they are looking for investors to provide the cargo vessel after Indonesia barred its boat to ply the Davao-General Santos-Bitung route.
He said the Indonesian Consulate in Davao informed them that Jakarta objected to utilizing the vessel given to Talaud Island, as agreed earlier, to service the two BIMP-EAGA areas.
BIMP EAGA stands for Brunei Darussalam, Indonesia, Malaysia, the Philippines-East ASEAN Growth Area, a cooperation formed in 1994 to accelerate the growth of less developed areas of the participating member countries. Mindanao and Palawan in Luzon are the Philippines’ focus area for BIMP-EAGA.
“The vessel was acquired 20 years ago by the Indonesian government for Talaud Island to ferry its constituents. Also, there’s difficulty in converting it (into a cargo vessel),” Billena said in an interview on Wednesday.
He did not give a definite date when the Mindanao-North Sulawesi trade could begin, noting the lack of ship to service it even as he claimed that the “Philippine side is ready for its part of the action.”
Billena, one of the local business leaders actively involved in working to start the trade exchange between Mindanao and North Sulawesi, said they are hoping to find investors who can provide the ship to ply the route soon.
The shipping route needs a vessel with a gross register tonnage of 2,500, or one that can carry 120 container vans, he said.
The Davao-General Santos-Bitung sea route, which was supposed to start June last year, seeks to enhance connectivity to boost trade exchange in the BIMP-EAGA.
Billena said that the Davao-General Santos-Bitung sea route, whose servicing is also strongly pushed by the Mindanao Development Authority (MinDA), would significantly reduce the cost of transporting goods between these points.
Currently, products from North Sulawesi going to the cities of Davao or General Santos have to pass through Jakarta and Manila, and vice versa.
Billena said producers could save as much as “40 percent in logistical expenses and 60 percent in travel lead time” with the Davao-General Santos-Bitung route.
General Santos and Bitung are just 350 nautical miles apart, he said.
Secretary Luwalhati Antonino, MinDA chair, said the direct shipping route can offer savings of as much as US$1,650 per 20-foot container for traders.
Citing a study by the Japan International Cooperation Agency, shipping rate for the Davao-General Santos-Bitung route would cost only US$550 per 20-foot container, she said.
The agreement to operationalize the Mindanao-North Sulawesi shipping service was sealed in Jakarta in April 2014 by the representatives of the Indonesian shipping line PT Kanaka, the North Minahasa Chamber of Commerce of Indonesia, Philippine-based cargo company ARREE Freight Express and the Davao City Chamber of Commerce and Industry, Inc. (Bong S. Sarmiento / MindaNews)