New Market Report: Indonesia Freight Transport Report Q2 2010

Recently published research from Business Monitor International, "Indonesia Freight Transport Report Q2 2010", is now available at Fast Market Research
 
March 12, 2010 - PRLog -- The US$1.5bn Central Kalimantan Rail Project was due to be tendered by the end of 2009 or early 2010, it was reported in mid-September. The contract is crucial to aiding the transport of coal in the coal rich province, and will allow the mines to maximise production. The Central Kalimantan rail project will run for 185km, linking Puruk Cahu and Bangkuang. It is planned to be awarded as a 30-year concession, and according to Mining.com 11 countries have already expressed an interest in taking part in the project. The government has been working to ready the project for tender, and to make it more attractive to potential investors. The feasibility study for the project has been completed, and the government is now trying to purchase land. The project includes the construction of a single track of railway as well as construction of stations, workshops and coal loading and unloading facilities. Once the project is completed, which is set for 2012, the railway will be capable of transporting 10mn tonnes of coal per year, increasing to 20mn tonnes following the first 10 years of operation. We have lifted the economic outlook for Indonesia. We are now forecasting 4.0% GDP growth for 2009, up from 3.6% previously. For next year we see the economy expanding by 4.8% (was 4.5%) followed by 4.9% in 2011 (no change). It must be noted, of course that this scenario is better than that facing the majority of world economies, which experienced outright GDP contraction this year. For the new 2010-2014 forecast period as a whole, we now expect average annual Indonesian GDP growth of 5.0%, less than the 5.5% 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 is a clear pointer towards improvement. We pulled back our shipping numbers in view of falling demand for commodity exports. Overall, our projection for average annual growth in freight carried in 2009-2013 is 5.6% expressed in mntkm. According to our latest estimates, transport and communications (T&C) GDP will have risen by 4.0% 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 5.3%, compared to 5.0% for GDP The total value of T&C GDP will rise to US$66.5bn in nominal terms by 2014, representing 6.6% of Indonesia's GDP. The T&C sector employed 5.86mn people, or 5.9% of the labour force, in 2009. We see those figures rising to 6.53mn and 6.2% by 2013. 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 series on rail and airfreight. We are projecting an overall annual average growth rate of 5.6% for the freight transport sector during 2009-2013 in volume terms. To put this in context, growth will be marginally higher than GDP expansion - expected to average 5.0% per annum. The reality is that, for an economy of Indonesia's size and resources, this will be still be somewhat below what the country itself and its freight industry has 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 and 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 5.8% during the forecast period. Pipeline throughput will average 5.9% 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 lower growth of demand from China and more sluggish world trade, we are forecasting annual average growth of 6.1% in maritime freight and 5.4% in coastal freight. Rail freight growth will average 5.8% 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 5.2% during the 2010-2014 period. Limiting factors will be congestion and the relatively slow rate of highway expansion.

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Tags:Freight, Transport, Traffic, Rail, Coal, Airfreight, Tampc, 2010-2014, Railway, Indonesian
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