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Indonesia Freight Transport Report Q2 2010Published by: Business Monitor International Published: Feb. 16, 2010 - 73 Pages Table of Contents
AbstractA joint venture from the UAE had been cleared to invest US$1bn in the construction of a railway in Indonesia’s East Kalimantan, it was reported in December 2009. The project will be the first private railway in Indonesia. The railway, being built by MEC Infrastructure, was now ready for construction, meaning all regulatory hurdles had been passed. The project had been in negotiations for more than a year, having encountered difficulties that included trouble in securing a railway operating licence. The railway will stretch 130km and will link a coal mine in Muara Wahau to the coast, where a US$250mn new port is being built by MEC Holdings.Since our last quarterly report, we have again lifted the economic outlook for Indonesia. We now estimate that the economy grew by 4.3% (up from 4.0%) in 2009 and are projecting expansion of 5.2% (4.8% previously) in 2010 and 5.5% (from 4.9%) in 2011. For the 2010-2014 forecast period as a whole, we now expect average annual Indonesian GDP growth of 5.3%, less than the 5.6% average registered in the preceding half-decade but still an impressive performance in comparative terms. We maintain caution in our turnover forecasts for airfreight. This is to take account of the impact of ongoing safety and financial concerns, although the lifting of the European flight ban in 2009 is a clear pointer towards improvement. We had earlier pulled back our shipping numbers in view of the cyclical downturn in demand for commodity exports. As the moderate global economic recovery unfolds, our projection for average annual growth in Indonesian freight carried in 2010-2014 has been edged up to 5.9% expressed in million tonne kilometres (mntkm). According to our latest estimates, transport and communications (T&C) GDP rose by 4.3% in 2009, on a par with GDP. For the 2010-2014 forecast period, we expect the T&C sector to expand a little faster than the economy as a whole at an annual average of 5.6%, compared with 5.3% for GDP. The total value of T&C GDP will rise to US$68.2bn in nominal terms by 2014, representing 6.6% of Indonesia’s GDP. Overall, we forecast that Indonesian macroeconomic growth, although a little slower than at first expected as a result of the more difficult global climate, will be supportive of the freight transport sector throughout the forecast period. The tsunami disaster of December 2004 did not significantly affect our projections, given that it did not strike at what could be called the country’s core freight transport infrastructure. Despite a lack of reliable statistics, in recent reports BMI has gradually introduced new estimates for traffic carried by road, coastal shipping and pipelines to supplement existing data on rail and airfreight. We are projecting an overall annual average growth rate of 5.9% for the freight transport sector during 2010-2014 in volume terms. To put this in context, growth will be marginally higher than GDP expansion. The reality is that, for an economy of Indonesia’s size and resources, this will still be below what the country and its freight industry have the potential to achieve. By transport mode, we expect airfreight to retain some positives, reflecting not only its importance in a country of islands but also the effect of growing domestic deregulation as well as significant regional passenger and freight demand. There are also negative factors, however. We earlier adjusted the forecast downwards on the back of safety concerns and the inevitability of a shakeout among the new budget operators. The partial lifting of the European flight ban is a plus. Our projection now is that airfreight traffic, measured in mntkm, will grow at an average annual rate of 6.1% during the forecast period. Pipeline throughput will average 6.2% annual growth, boosted by the development of natural gas exports. Sea and inland waterway freight traffic will be influenced by an interplay between domestic demand for freight between and within islands, as well as the wider growth in regional container-based traffic. Taking into account the recent dip in world trade, but also the emerging recovery, we forecast annual average growth of 6.5% in maritime freight and 5.7% in coastal freight. Rail freight growth will average 6.1% per annum. Although the pressure of passenger demand and lack of investment funds facing the state-owned railway system is limiting freight capacity, we expect traffic to grow more rapidly towards the end of the forecast period as the Trans-Sumatra rail link comes into operation. While reliable road haulage statistics are not available, on the basis of our estimates we expect growth in traffic to be around 5.5% during the 2010-2014 period. Limiting factors will be congestion and the relatively slow rate of highway expansion. Get Full Details About This Report >> |
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