WASHINGTON: Malaysia’s answer to Singapore consolidating its ports to enhance efficiency and reduce cost will come from an ongoing national port study. According to officials from the regulators of ports, the government has called for the study to be expediated in light of the developments in Singapore that recently launched the construction of the first phase of a mega port in Tuas that will eventually have a capacity to handle 65 million twenty-foot equivalent units (TEUs).
“The economic council is looking into this matter on how to help the local port operators compete effectively against Singapore’s move. One option is to allow the domestic ports to increase their capacity so that they can achieve economies of scale,” said an official.
Singapore and Malaysia are the only two Southeast Asian countries that are in the list of the world’s top 20 busiest container ports. Both countries’ ports have been banking on traffic plying through the Straits of Malacca, which is one of the busiest shipping lanes in the world connecting the West to the Far East. Singapore which is the world’s second largest port handled 33.87 TEUs while Port Klang was at 12th place with 10.95 million TEUs in 2014. The volume from Port Klang comes from Northport and Westports.
Malaysia’s other notable port is the Port of Tanjung Pelepas (PTP) that is ranked at 18th place handling 8.5 million TEUs in the same year. In April, Singapore launched the first phase of its mega port in Tuas that will have an annual capacity of 20 million TEUs. The 30-year development, when completed, will see Tuas mega port equipped with total annual capacity of 65 million TEUs following the country’s plan to move all its port activities in one place. The objective is to improve efficiency and cost. The existing ports in Tanjong Pagar and Pasir Panjang would be redeveloped for other purposes including property developments.
As for Malaysia, the initial suggestion from the consultants helping the World Bank in its national port study is that the country needs to improve on growing its hinterland traffic. Hong Kong-based consulting firm ICF International that is working with the World Bank on the study had said that while Malaysia had been successful in capturing increasing amounts of transhipment container volumes, consistently gaining share from Singapore since 2004, it was comparatively less successful in charting growth in hinterland (import-export) container and bulk volumes, particularly outside of the primary Port Klang complex.
It stated that international competition for port market share has intensified across South-East Asia (SEA), not only in traditional powerhouses like Singapore and Hong Kong, but in emerging, aspiring hubs like Vietnam and Indonesia that also have hinterlands that attract manufacturing and other import-export activity. The national port study with recommendations was supposed to have been completed in the first quarter of this year but has been delayed. Reacting to the development in Tuas, Westports chief executive officer Ruben Emir Gnanalingam (pic) told StarBiz that it was a long-term project and he believed that there was a lot of room for transhipment volumes to grow in Southeast Asia.
