Questioning the commitment of company to the cruise ship financing
23- August - 2011

Jakarta (ANTARA News) - The Japanese government has poured a loan to the empowerment of national maritime industry worth 400 million U.S. dollars. Unfortunately, this commitment is hampered by bureaucracy in the country who still have not decided who will act as a conduit and recipient alias debtor funds.

A director-level officials in the Ministry of Transportation found, PT PANN expected to act as a dealer since the company has sufficient experience (Business, August 15).

PT PANN does have experience in the field of ship financing (shipfinancing) because the state established 1974 is indeed its primary mission is in the field of ship financing. This mission is one of them reflected in its name: Development of National Commercial Fleet or abbreviated PANN.

But over time, there is a pretty fundamental change in the body of the company. Associated with the possibility of a loan portfolio of the State Sakura 400 million U.S. dollars, changes in PT PANN above could be more or less will affect performance.

Change of mission
PT PANN established by the leadership of President Suharto era as an alternative non-bank financial institutions engaged in the financing of the vessel, with the aim of developing a national shipping. The mechanism for channeling funds to the model is leasing, purchase on installment, and sale and leaseback.

Because of special institutions for the cruise business, expected interest rate offered by this company to the debtor competitive than that offered by banks. One of the program is the project PANN PT Caraka Jaya Commercial cargo ships.

However, in 1991, for reasons to finance different types of capital goods, PT PANN changed its name to PT PANN Multi Finance. This policy lasted until 2004. For thirteen years this so-called company involved in financing the development of the golf course to the airline industry (IPTN). Just a piece, if not to be none at all, of their funds allocated to the cruise business (this is a friend of mine said that a ship owner and operator).

In 2004, citing the commercial finance business turns profitable PT PANN re-focus on its core business as ship financing company. This is reinforced by the commitment of bank lending to PT PANN. One was from Bank BRI. Since 2007, state-owned bank has been providing millions of dollars in loans to PT PANN which then disbursed to the shipping company.

Indeed since 2005, after the implementation of Presidential Instruction (Instruction) No. 5 Year 2005 on National Shipping Industry Empowerment, world cruise is stretched. By Presidential Decree No. 5 of 2005 revitalized the cabotage back later formally adopted by Law No. 17 of 2008 on Shipping.

Also ratified the International Convention on Maritime Liens and Mortgage (International Convention on Maritime and Mortgage Receivable, 1993) through Presidential Regulation. 44 in 2005. That has not ratified the Convention or the Vessel Detention principle Internationaal Convention on Arrest of Ships, 1999. If the last rule could be ratified by Indonesia, it is now complete legal aspects of ship financing in the country. The banking sector, including financial institutions, do not have to worry anymore in giving credit to the shipping company. And, stop regarding this high-risk industry.

It is estimated in the next 10 years, the need for new vessels in Indonesia increased sharply. It is estimated there are 5,000 ships to be provided during the period, both new and used. According to data from the Indonesian National Shipowners' Association (INSA), the national shipping business until 3:38 it took about 2.7 billion U.S. dollars for the procurement of new ships / used in recent years.

From a business standpoint, the change of mission PT PANN was probably legitimate. But still to be scrutinized. The public need to question about the fate of the project PANN PT Caraka Jaya III where the company is the leading sector. The government could potentially lose U.S. $ 98.41 million due to ship 14 units of ex-Caraka Jaya III, which is imported from Japan and Germany 14 years ago, threatened to scrap metal.

Therefore, mumpung winds of change were siding with the national shipping business would be wise if you held a thorough audit of PT PANN, especially in the period when it is outside its core business as a finance company specialized vessels.

Hopefully, by the fact that there are audit issues in relation to PT PANN and state efforts that participate in the empowerment of domestic shipping can be mapped properly. Thus, the establishment of a special bank maritime discourse initiated by some maritime observers could be realized with sufficient upgrade PT PANN without the need to create new institutions.

Establishing new institutions means the cost of new capital, new offices and hiring new people. Regardless of the problems that enveloped him, it must be admitted PT PANN an experienced company in the field of finance.

Love it if not used properly. All you need to do is to create a corporate audit of accountable, transparent and deserve to be partners by the national shipping companies always face financial constraints for fleet procurement. (****)

*) The Director of the National Maritime Institute (Namarin)

Editor: Bambang



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