(Eagle News) — The opening of the shipping route within the Brunei Darussalam Indonesia Malaysia the Philippine East ASEAN Growth Area (BIMP-EAGA) is expected to further enhance trading between the Philippines and Indonesia.
A Roll-on Roll-off (RoRo) ferry service will begin plying the Davao City-General Santos-Bitung, Indonesia route on April 30 2017, which will provide a faster and cheaper channel of trading goods among EAGA’s key cities.
M/V Super Shuttle RoRo 12, operated by the Asian Marine Transport Corporation will provide a weekly shipping service to the route with a vessel capacity of 500 Twenty Foot Equivalent Units (TEUs).
“Sea linkage within the EAGA sub-region is crucial in strengthening trade relations among its member countries, since it supports the achievement of the goals of the other EAGA pillars such agribusiness, tourism, and socio-cultural and education,” said Secretary Datu Abul Khayr Alonto, chairman of the Mindanao Development Authority (MinDA).
Secretary Alonto, who is also the Philippine signing minister for BIMP-EAGA added that maritime transport is vital to the sub-region’s development, and the Philippines will continue to push for the opening of sea routes within.
“We are calling on and encouraging key industry and business players and traders to participate in this initiative and to take advantage of the business opportunities and benefits that this new route will provide,” he added. Private sector support is critical to the sustainability of this project which will be the Philippine government’s maiden accomplishment under its chairmanship of the ASEAN this year.
The opening of the route is a more cost and time-efficient alternative to the usual Manila to Jakarta to Bitung route, which would take about three to five weeks of shipping time. In contrast, direct shipping through the Davao-GenSan-Bitung route will take only one day and a half of sailing (excluding port stay).
A savings up to $1,500 (P74,000) per TEU is estimated in using this route given its $700 (P34,713) per TEU rate per 20 feet dry container as compared to using the Davao-General Santos to Manila to Manado via Jakarta route which amounts to $2,200 (P109,098) per TEU.
Secretary Alonto said the opening of the route will provide greater access for local businessmen to engage in international trade, as well as stimulate other areas of development such as joint tourism promotion, establishment of direct linkages, and increase in investment inflows, among others.
Among the goods identified by the private sector in Mindanao at this stage that will be shipped to Indonesia are: animal feeds, fertilizer, construction materials, ice cream products, poultry (halal), fresh fruits, and synthetics.
Initial list of import goods on the other hand include matured coconut, copra, corn, feed ingredients, lumber, cement, high value crops, vegetables, meat, peanuts, aqua products, charcoal, soya, coffee beans, and sugar.
Arturo Boncato Jr., assistant secretary of the Philippine Department of Trade and Industry said the RoRo service is one of the priority projects of BIMP-EAGA’s connectivity group.
He explained that with the completed port improvements and the declaration of the city of Bitung as an international port, the sustainability of the route becomes more feasible as the Indonesian government has provided its full support to the link’s opening and operation.
Boncato, a senior official to the BIMP-EAGA said the route is extremely beneficial due to the substantial cost savings it offers, resulting to improved competitiveness for our Mindanao products which have been gaining interest within the sub-region, while adding “the route will provide a more efficient access for local businessmen to engage trading with Indonesian counterparts.”
In a feasibility study conducted by the Japan International Cooperation in 2012, the Gensan-Bitung route was selected as one of the pilot areas for a roll-on roll-off operation within BIMP-EAGA. The study also highlighted that the route can be dedicated to a freight service once shipping service requirements are in place.
A study conducted by the Research Education and Institutional Development Foundation through the US Agency for International Development in 2010 revealed that the North Sulawesi-Mindanao sea link offers strong potentials for international trade and commerce between Indonesia and the Philippines since it offers a proximate channel for the shipment of goods. (Courtesy ASEAN 2017 website)