Expert in Wooden Boat Building & Repair - Jakarta, Lake Toba, Kendari, Jayapura The project brief for this pre-approved position was to provide technical assistance to a public ferry operation on Lake Toba, North Sumatra. Due to delays in the  funding & concept approval, this project was finally advertised 2 years after it was submitted to UNIDO headquarters in Jakarta. The target expert was Dutch naval architect Gerard Dijkstra but he taken another posting in East Java working for the HIVOS organization. Island Aid's Rick Cameron was offered the posting in Jakarta in late 1984. On arrival in Lake Toba, it was clear that conditions had changed significantly and that the project brief was no longer relevant. In fact the lake level had dropped over 2m after a hydro electric project feeding a Rayon plant started operations and almost ever tree in the vicinity had been stripped for feedstock. The site that had been secured for a boatyard was located in a shallow part of the lake and when the water dropped, the new shore line was almost 1km away. The boat that was to be designed and supervised had been built from the last remaining timber in the area and it was already in a poor state of repair. Funds were long gone and it was suggested that the project be rewritten with the aim of starting a modern boat yard producing boats for the fisheries sector.

			Proposal for a KIT Boat Industry Almost 18 months was dedicated to travel to many of Indonesia's most remote provinces to research and evaluate existing boat numbers, current needs, existing problems and future issues. Areas visited included:

			Research UNIDO required regular visits to Vienna for briefing/debriefing and Rick arranged for a side trip to the UK to meet with British naval architect, Edwin Gifford, for consultations regarding his work in India. Designs suitable for Indonesian off the beach fisheries were the top priority as an Indonesian Government credit program had been announced to help upgrade this sector. The result of this collaboration was the donation of the "Catfisher" design to the Project on the understanding that after a prototype was tested, modified and accepted, that a royaly would be paid on all future production.

			Report & Proposal Research efforts were intensified and a local naval architect was recruited to assist with the production of a detailed proposal. The proposal was completed in 1986 and it was titled "A Proposal for the Establishment of a Kit Boat Industry in Indonesia". The concept involved the production of laminated wood and plywood components at a central manufacturing facility and the shipping of a "kit" comprising all the materials, components, adhesives, fixings, and hardware required to build a boat using local labor in remote areas.  Assembly of boat hulls would be preceded by a training program in each of the fishing communities where boat builders had been identified and where interest was strongest. The concept had been discussed in general terms during research trips and it was clear that the idea was workable.

			PT KIT The core focus of Project INS 85/37 was to identify Indonesian entrepreneurs and to assist them to establish businesses involving new technology. The UNIDO team leader was approached by a highly respected Indonesian accountant who was keen to establish in the fisheries and boat building sector. The "Kit boat" concept was well received and an agreement signed to proceed using private funds and with technical support from UNIDO. Land was secured with river frontage at Muara Dadap and a new company formed (PT Kapal Indo Teknik). Buildings were prefabricated at a residential staff mess from plywood, epoxy and solid wood laminated into sections that were small enough to be carried by 2 men. Foundation blocks were then poured in concrete and the building erected on site without heavy equipment. These building components were then produced in the facility and shipped together with boat kits so that assembly yards could be replicated in remote areas by unskilled labor.

			Implementation "Kit boat" assembly yards were constructed in Jayapura and Kendari. These yards produced two types of product. Smaller plywood boats were prefabricated in that Muara Dadap yard and then assembled, painted and equipped ready for sale. Larger laminated fishing boats were built when a firm order was placed by fisher coops or private buyers. Design and technical assistance was provided by the Muara Dadap yard. A range of boats were also produced that were aimed at the marine tourism market. Dutch naval architect Gerard Dijkatra joined the UNIDO team and several other technical advisors were recruited to assist. UNIDO refused to expand the scope of the project (under the Feasibility Study Section) to include technical support and engineering. Direct Dutch G2G aid was negotiated to support transfer of technology, design and management needs. A range of medium size motorized fishing boats known as the "Minifisher" were designed by the Dutch led team for production in laminated wood and plywood using modern adhesives.   The Muara Dadap yard remained in operation for 6 years and was then converted to other use by the owners. The yards in Kendari and Jayapura are understood to still be in use building laminated wood tuna fishing boats for companies involved in frozen and fresh tuna exports.

			Credit Issues In 1985 the Fisheries Dept introduced a special credit scheme to assist fishermen to motorize their boats. Unfortunately only one engine manufacturer and sales agent was approved (The children of one of the countries leaders was the owner of the company) This left the fishermen with a "take-it-or-leave-it" situation. Engines were good quality marine units ranging between 33hp and 45hp from a well known Japanese maker. Because most fishermen do not own land, collateral for the engine loan was stipulated to be the boat hull. Incentives were offered so that fishermen would sign a credit agreement, the bank would then pay the engine agent, the engine would be signed for by the fishermen as received and the fishermen would then by given approximately 30-50% of the engine selling price in cash. The agent simply kept the engine to sell again to a cash buyer at a later date. The agent would arrange for a few payments to be made to the bank on behalf of the fishermen. As soon as these payments ceased the bank would be left with the impossible job of chasing the fishermen for the money or the repossession of the engines. Any fishermen who could be tracked down would simply say that the boat (and engine) were lost at sea without trace. After a few months the banks put enough pressure on the government to cancel the program but by that time many thousands of engines had been "sold". The banks then put a black ban on all fishing industry credit and PT KIT sales stopped overnight. The production capacity of the boat yard moved to larger more expensive power boats for marine tourism and transport. Unfortunately after the engine credit fiasco, banks generally interpreted all boat loans as being high risk and it became clear that the market was not likely to develop until that perception could be changed. It was not considered feasible to target the fledgling marine tour industry market without access to credit and the boat building operation was shut down. Equipment for laminated boats is not expensive being mostly hand tools and hand power tools and so the appreciation on the land more than compensated the owners.

			Conclusion Fishermen have very low buying power and the availability of credit is absolutely critical for any renewal of existing fleets to occur. The fish boat products produced by PT KIT were enthusiastically received while credit was available but too expensive at the time to compete with poorly built boats using low cost timber. Illegal logging combined with large fuel subsidies created an artificial market for both boats and engines. Other countries in the region adopted ply epoxy boats 15 to 20 years ago because timber resources were exhausted and because fuel efficiency was already a dominant factor. The current leadership in Indonesia has simultaneously shut down illegal logging and is well on the way to eliminating fuel subsidies.  This painful readjustment process took many years in India but Indonesia is now facing huge changes in a compressed time span of months. It was also clear that the investment in manufacturing boats as the only products for the yard was a factor in the eventual closure of the yard. Market forces in Indonesia were being manipulated in ways that only a privileged few could anticipate. Had the boat yard diversified into other products that could have made use of the same workforce and equipment, the operation may have survived to play a role now. Many of the local staff who were trained by UNIDO experts are now employed in the boat building industry in Indonesia and so the transfer of technology could be considered to be a success in terms of the development of human resources.

			Footnote Gerard Dijkastra has agreed to sit on Island Aid's technical advisory board and he brings with him a wealth of experience and leading edge technical and design skills of the Lutra Design Group <http://www.gdnp.nl>