26 Jul 1999

Port growth depends on operator

NST Online

THE growth of the Port of Tanjung Pelepas (PTP) will depend on how the operator markets the port in the initial stages of its operation.

PTP, which is expected to commence operation in January next year, is often touted as a potential challenger to Singapore's position as the main port in the region.

Chairman of the International Shipowners Association of Malaysia Abdul Latif Abdullah said PTP, which he described as an infant and out to attract main line operators, will face a lot of pressures from Singapore.

He said PTP, besides wooing main line operators, should concentrate on developing an effective feeder network.

"This will ensure that the port will able to bring in sufficient containerised goods which will in turn attract the attention of main line shipping operators," he said.

"It's not easy for shipping lines to make a decision as some of them operate through consortiums, hence only if PTP is able to constantly having a good throughput can it expect to see main line shipping operators calling at the port," he told Business Times.

"No doubt, shipping lines are looking at the possibility of moving some of their operations to PTP but for now most shipping lines are just watching how PTP will perform."

Abdul Latif said that PTP's close proximity to Singapore, which is a major advantage to the port, is also the port's major drawback as Singapore's economic backbone is tied to its position as a major hub in the world.

Abdul Latif admitted that it is difficult to dislodge Singapore's position as the number one hub in the region for now.

"Singapore is an island state with no natural resources and if it perceives that PTP is trying to eat up on its business, then it will definitely guard its interest," he said.

Abdul Latif said that if PTP were to challenge Singapore in the early stages, then it will be facing an uphill task against a very experienced and reputable adversary.

"There will be very minimal effect on Singapore if PTP were to market itself as an alternative to Singapore which is a mega hub while PTP is in its infancy."

Asked if Singapore will possibly reduce its port charges in the near future if it sees PTP as a threat to its position as the major port in the region, Abdul Latif said Singapore will likely stick to its current rates while marketing its capabilities.

"What they (Singapore) can offer is quick turnaround time, good infrastructure, transparent port charges which shipping lines are most interested in," he said, adding that although cost-savings measures are welcomed by shipping lines, the above factors are the ones that will determine which port main line operators will call at.

According to Abdul Latif, the port which will most likely be affected in the immediate term by PTP is the port in Pasir Gudang (which also located in Johor).

He said if PTP is to gain a solid foothold in the short to medium-term, then the most logical sequence will be that it will have to eat up on Pasir Gudang's market share.

Hence, he pointed out that PTP will also not affect Port Klang's position as the major port in the country because currently there is no feedering from Pasir Gudang to Port Klang.

"Whatever feedering that is going from Port Klang to Singapore will remain, leaving PTP to fight it out with Pasir Gudang for the feedering business from the southern part of the country to Singapore," Abdul Latif said.

Asked on the possible scenario on Port Klang in the event of PTP becoming a huge success, Abdul Latif said it will be difficult to dislodge Port Klang.

"Firstly, Port Klang is an established hub in its own right and secondly, it is the Government's national load centre, with Port Klang as the main port for the country," Abdul Latif said, adding that geographically PTP is more ideal to be the main port in the country.