Shipyards form consortium to improve competitiveness

Indonesia's eight largest shipyards have formed a consortium to leverage their competitiveness in the global market, while they eye a US$400 million project to build tankers for state-owned oil and gas company Pertamina.

President Megawati Soekarnoputri witnessed on Wednesday the signing of a memorandum of understanding (MoU) on the consortium, called the National Shipyard.

The shipyards hope that as a consortium they will be better able to compete against international shipbuilders.

Signing the MoU were representatives of PAL Surabaya, Dok Surabaya, Koja Bahana Jakarta, Dumas Surabaya, INGGIM Jakarta, Duta Marina Indah, Intan Sekunyit Palembang and IKI Ujungpandang.

State Minister of State Enterprises Laksamana Sukardi said the consortium was negotiating with Pertamina for the construction of 38 tankers by 2008.

"Currently the talks center on building 10 to 12 ships at a total value of $400 million," Laksamana, who also attended the signing ceremony, said.

One official who declined to be named said the local shipping industry was capable of building ships of up to 26,000 deadweight tons.

The official said local shipyards were unable to build anything beyond that size in accordance with international standards.

He added that the eight shipyards also established the consortium in response to competition from Chinese shipbuilders.

Megawati witnessed the signing ceremony along with her husband, businessman and legislator Taufik Kiemas. (*)