Economy


Mindanao-Indonesia ferry service to boost BIMP-EAGA trade




Posted on August 26, 2014


DAVAO CITY -- Roll on Roll off (RoRo) ferry services will begin plying the Davao City-General Santos City-Tahuna-Bitung route on Oct. 1, with at least 30 traders and businesses so far signifying intent to use the facility.

Rey L. Billena, Philippine Chamber of Commerce and Industry (PCCI) regional governor for Southwestern Mindanao, said the official launching of the service will be Sept. 1 for General Santos City (GenSan) and Sept. 5 for Davao following the arrival of the vessel MV Beverly owned by Indonesian shipping line PT Kanaka in GenSan on Aug. 31.

The sea route, Mr. Billena said, will provide a faster and more affordable option for traders with travel time of only eight days and shipping rate of $550 per 20-foot container.

“The cost of shipping will only be roughly around $1,300 from Bitung to Gensan compared to the $2,800 cost of shipping via the Bitung-Jakarta-China-Singapore route,” he said, adding that he main trade route takes 23 days.

Among the goods that are being eyed for shipment between Mindanao in the Philippines and North Sulawesi in Indonesia are construction materials and agricultural products.

The RoRo service, a priority project of the Connectivity group of the Brunei-Indonesia-Malaysia, Philippines East ASEAN Growth Area (BIMP-EAGA), was supposed to have started earlier this year but was delayed by adjustments on the Indonesian side.

Romeo M. Montenegro, Mindanao Development Authority (MinDA) director for Investment Promotions and Public Affairs, explained that authorities had to wait for the completion of improvements at the Indonesian port and the declaration of Bitung town in Manado as an international port.

Mr. Montenegro said the route is very viable given the increased demand for Philippine products in the area, especially fresh produce.

DAVAO, GENSAN PORTS
“The strategic location of Davao and General Santos make them ideal as a transshipment hub,” Trade Secretary Gregory L. Domingo said.

Aside from the BIMP areas, Mr. Domingo said the two Mindanao cities can also serve as a transshipment hub covering trades to and from West Guinea as well China, Japan, Korea, Taiwan, Vietnam and the Philippines.

However, he added that “to realize this potential, further investments in infrastructure and policy changes have to be effected.”

Mr. Billena also pointed out that while the ports in both Davao and GenSan are already accommodating international shipments, there is a need for more cranes in these facilities. The cranes will cost about P15 million each.

He noted that Bitung is smaller than the two cities but has more advanced facilities and equipment.

Meanwhile, Mr. Montenegro said EAGA officials are also pushing for the operation of another RoRo from Brooke’s Point in Palawan to Sabah, Malaysia and then to Muara, Brunei.

A RoRo ramp is currently being built in Kudat, Sabah, Malaysia. -- Carmencita A. Carillo