Indonesia is an archipelago country with 3,257,483 sq km of its region is ocean. It has 17,504 big and small islands of which only 6,000 islands are inhabited. As an archipelago country, shipping and seaborne trade plays important role for the Indonesia economy development. It is the lifeblood of the country. Ironically, for many years foreign shipping companies have been dominating Indonesia shipping industry. The Presidential Instruction No. 5/2005 on National Shipping Industry
Empowerment marks the beginning of Cabotage principle. Cabotage principle essentially enforces all shipping and seaborne activities within Indonesia region are served by Indonesia-flagged ship and owned by Indonesia companies. The enactment of Cabotage principle opens wide opportunity for Indonesia shipping companies and/or investors to alleviate the dominance of foreign shipping companies. Cabotage principle also applies for vessels used to support Offshore Oil and Gas exploration and exploitation activities. The Indonesia Government also set the deadline for all oil and gas companies operating in Indonesia (KKKS) to replace any foreignflagged ships used by them with the Indonesian-flagged ships. PTGMI as a consultant and marine engineering company identify an opportunity to expand his business by providing ship for KKKS. This project is intended to assess all risks that exist in shipping industry. Internal analysis also carried out to identify strength and potential possessed by PTGMI that will be beneficial for the company management to overcome all threats that may arise in
association with company business plan. Ship – as the main tool to generate revenue –may be obtained through several acquisition method, whether equity, loan arrangement, or lease. Lease method will become the focus of this project. Advantage and advantage of ship lease from lessee's point of view are presented here. Economic evaluation of ship acquisition through purchase and finance lease using 5,000 BHP AHTS as an example will be reviewed. Investment parameters, such as NPV, IRR, PBP, and PI are calculated for both cases to identify and determine the feasibility of ship acquisition for PTGMI