Indonesia probes possible Batam ferry price-fixing

JAKARTA/SINGAPORE – Singaporean manager Zheng Huang was shocked to find that his round-trip ferry ticket to Indonesia’s Batam island had soared to more than $70 over the past two years.

The 53-year-old, who used to visit the holiday spot every weekend for dining and shopping, now limits his trips to once or twice a month.

“That is the only way out now... (So when) you are there, you better make the most of your time,” he told The Straits Times.

His friends shared his frustration. “It’s not within our control... we are held hostage,” he lamented.

Like Mr Zheng, other Singaporeans who make the hour-long journey have been left baffled by the steep hikes – uniformly imposed by multiple operators – after Batam, part of Riau Islands province, reopened to international travellers in January 2022 as the Covid-19 pandemic waned.

Now, the mystery may be a step closer to being solved after Indonesia’s independent business watchdog disclosed that it has launched a probe into potential collusion and price-fixing among ferry operators on the route.

The probe began in 2022 following complaints from passengers, and the local media reported about the investigation on May 29.

On May 29, Indonesia’s Business Competition Supervisory Commission revealed that operators charged 800,000 rupiah (S$67) to 900,000 rupiah for a round-trip ticket from January to June 2022, more than twice the usual price of 270,000 rupiah to 450,000 rupiah.

An ST check on the websites of ferry operators found that round-trip tickets from Singapore’s HarbourFront Centre to Indonesia’s Batam Centre International Ferry Terminal cost $34 to $60 in 2021 and $56 to $76 in 2024.

Mr Ridho Pamungkas, the commission’s chief for the northern Sumatra region, told ST that four operators are under investigation for alleged cartel practices, with their Singapore-based parent companies yet to be summoned. Attempts by ST to contact the companies have been unsuccessful.

“The prices now are unreasonably high. It appears the businesses have agreed to fix prices at similar high values, so there is no competition between them,” he said.

Mr Ridho noted that ferry ticket prices between Batam and Johor Bahru are lower despite the longer two-hour journey, so the Batam-Singapore fare is “an unhealthy sign”.

The commission has faced “many obstacles” during its investigation over the past two years, such as obtaining information on the operators’ expenses, he said.

“The ferry operators’ management was uncooperative in providing data, making it difficult to gather evidence,” Mr Ridho said, adding that the parent companies being based in Singapore – and thus outside Indonesia’s legal purview – only complicated matters.

The commission’s head office in Jakarta held a focus group meeting with the Transportation Ministry, BP Batam and the Riau Islands provincial administration on May 28 to discuss the high fares and possible collusion.

A follow-up meeting will be held in Batam on June 11, this time with the ferry operators in attendance. “We are committed to resolving this problem,” Mr Ridho said.

According to Mr Ridho, around 200,000 people of various nationalities travel from Singapore to Batam each month.

BP Batam’s port management director, Mr Dendi Gustinandar, told ST that ferry ticket prices to non-domestic destinations had indeed increased post-pandemic.

Before the pandemic, ferry services between Batam and Singapore served 3.9 million passengers annually, including 1.9 million foreign tourists. Since then, ticket sales have recovered to 60 per cent of what they were before the pandemic.

Mr Dendi said operators have attributed the price hike to rising fuel costs and lower passenger numbers.

Ferry employees at Batam terminals declined to comment on the ticket prices, directing ST to “ask the boss”.

Meanwhile, Singaporean travellers say higher ferry prices will harm Batam’s tourism sector and deter people seeking affordable weekend getaways. Some plan to cut down on their trips.

Mr Benson Toh, 47, a public service manager, said: “I find this ferry ride expensive because Batam is so near. If the price keeps increasing, I won’t go there so frequently.”

Housewife Nur Fazirah, 25, said: “It is overpriced… Last time it was easy for us to travel to Batam, but now the price is not worth it.”

Singaporeans say they can understand why ferry operators were trying to make up for their losses during the pandemic, but that does not justify the current prices.

Ms Farlyana Johari, a 35-year-old special education teacher, said the price increase was too drastic, especially since there was no improvement in the quality of vessels or reduction in trip times, adding: “It is a lot to just go to Batam for one hour, then come back.”

But many others said they will continue to visit the island.

Mr Rick Heng, 51, a security supervisor, considers it a “give-and-take” situation given the global rise in prices of goods and services.

Another traveller, 45-year-old finance controller Vincent Lin, said: “I will continue to travel to Batam by ferry even with the price increase as things in Batam are cheap, so it is still worth it.”

• Additional reporting by Ang Qing