The role of government in the interisland shipping industry can be divided for analytical purposes into those tasks which are essential and those which arise as matters of policy. Some tasks such as the provision of adequate port facilities and ensuring the safety of navigation cannot be left to the private sector and would need to be performed even in a laissez-faire economy Casin the colonial period). Other activities such as the licensing of firms, controls over routing, specification of official freight rates, and subsidies for and controls over the introduction of new ships depend upon the specific aims of policy and may therefore be regarded as discretionary.

This chapter focuses upon the essential role of the government in terms of administrative and physical infrastructure. The first part dealing with administrative infrastructure outlines the structure of the Directorate-General of Sea Communications before looking specifically at the issues of marine safety, port administration and customs. The second pan dealing with physical infrastructure considers port facilities and domestic shipbuilding and ship repair.

ADMINISTRATIVE INFRASTRUCTURE

The Directorate-General

The Directorate-General of Sea Communications within the Ministry of Communications has under the New Order remained the locus of policy formation in the maritime sector.' In the process it has successfully defended its autonomy against encroachment by technocrats from three sides. At the beginning of REPELTTA1 the planning agency BAPPENAS tried to assert some control over the planning of the various components of the Ministry of Communications but never managed to establish its authority in this area. In 1973 the economist Dr Emil Salim was appointed as Minister of Communications, evidently with the task of instilling some technocratic discipline into the unwieldy department. While he built up a nucleus of skilled staff in the Ministry itself and carried out some long overdue reforms of the many administered tariffs in the field of communications — not least in the maritime sector — he was still unable in his five year term to bring the powerful directors general to heel.