PTP to compete

Tanjung Pelepas, which is 45 minutes away from the republic's port, is dubbed as the ultimate challenge to Singapore's status as the region's hub port owing to its strategic location and vast hinterland. Pelabuhan Tanjung Pelepas Sdn Bhd executive vice chairman Datuk Mohd Taufik Abdullah spoke to T. SELVA and HILARY CHIEW on the vision of the port of the next millennium.

TWO container berths at the multi-billion ringgit Tanjung Pelepas Port will kick-off operations at the turn of the century.

The first two berths will be able to handle 600,000 TEUs while the remaining four berths to be built in stages under Phase One are expected to contribute to the total forecast throughput of 3.7 million TEUs by the year 2005.

Pelabuhan Tanjung Pelepas Sdn Bhd (PTP) executive vice chairman Datuk Mohd Taufik Abdullah admitted that with PTP, we are confident that we can match Singapore."

Tanjung Pelepas is located strategically along the world shipping route in the Straits of Malacca.

Shipping companies will have to decide whether they want to call at Singapore or PTP. For either port, the diversion time (from the international shipping lane) is about 45 minutes.

"We have stirred a considerable amount of excitement among shipping lines which welcome an alternative. PTP is there to provide an alternative port of call in this part of the world", he said in an interview.

Head-on competition is inevitable. Vessels will not call at two ports within a short distance of each other, like what they are doing now between Port Klang and Singapore.

However, Taufik does not rule out the possibility that some main line operators (MLOs) which are calling at Port Klang may decide to move to PTP.

He explained that PTP was conceptualised with the sole purpose of capitalising on the growth of container traffic in the region and recapturing national cargo that have never seen the light of Malaysian ports.

He was referring to the over 30% of Malaysian boxes that are shipped from Singapore port via the causeway or feedered from other Malaysian ports.

"There is no conflict with the Government policy of making Port Klang the national load centre as 80% of PTP's operations will be concentrated on transhipment activities."

"Singapore and south Johor are important transhipment zones and at the moment, most of these (transhipments) are going through Singapore."

"Besides our first target, we are focusing our marketing efforts to woo Malaysian cargo owners still using facilities across the causeway, particularly those from Sabah and Sarawak."

"Unfortunately, having achieving those targets, we cannot turn away containers which are feedered to existing ports with direct calls. These are the ones we cannot control as we cannot say no to them," he added as a matter-of-fact

With Johor Port at Pasir Gudang, such a nationalistic mission was a bit too difficult to achieve owing to physical limitations, admitted Taufik.

"We are successful only to a certain extent, not so much because we cannot do it, but the physical attribution just does not attract MLOs to call frequently."

"This will change in time with PTP which will certainly attract more MLOs," he said.

He reiterated that in PTPs master plan calculations, it had never intended to snatch boxes from Port Klang

We believe that the container pie is getting bigger and we only want to have a share of it. This is based on a study which shows that the container business is still growing at a tremendous rate."

"Even Singapore will not see a reduction in the number of boxes with the presence of PTP, but perhaps a drop in the percentage of growth."

"Except for some development plans at Laem Chabang and Jakarta, we don't see anywhere else where cargoes will be handled," said Taufik.

He said that MLOs and major multinational corporations, in talks held with the intention to relocate their international procurement centres to Johor, had expressed interest in the investment in the southwest section of Johor.

According to Taufik, shipping lines were comfortable and looked forward to the development but would rather keep mum on the subject until the right time.

He said that work on the port has been progressing ahead of schedule except for a slight hitch when the Government declared that it planned to shelve some of the infrastructure projects.

For a while, the management wondered if they would be abandoned without an access road.

However, they were assured that the road project would not be affected by the cut in the Government's budget.

"Earth works on the 6km road connecting the port to the Second Link has started and we are on track again," said a relieved Taufik.

He said the loan for the project would not be affected by the economic downturn as the RM2 billion facility from local banks had been finalised last year and the guidelines were still in place except for interest rates which had gone up for the RM1.2 billion loan portion. The remaining RM800 million is fixed-rate loan.

Taufik said the management had tried to cut down on imported content like the 24 post-Panamax quay-side cranes and 79 rubber-tyred gantry cranes. The cost of each crane was slightly higher due to the weakening ringgit but the company is benefitting from competitive pricing in civil works to be carried out in other parts of the port.

"The approach channel, situated at the estuarine of Sg Pulai, is deep enough for fifth generation container vessels and we are dredging the mud-flat between the channel and the port proper to a depth of 15m.

"It has also been made into a two-way channel so that ships will not need to wait for a clear passage to sail in or outs he said of the current marine work taking place at the port.

Taufik reasoned that PTP should carry on as planned so that it would be there to capture business with the region's economic rebound, rather than be deferred until the situation improved.

He said that PTP would enjoy the advantage of staff training by its sister company Johor Port, and would arrive at some sort of synergy in terms of sharing of experienced workers.

On the Segamat Inland Port which is being developed into a cargo catchment to boost Port Klang container throughput, Taufik said it would certainly affect Johor Port's container count.

"We have got a substantial market there and the cargo is being shipped directly through the port on Wan Hai, Yangming and Hyundai vessels so the country is benefitting from it."

"It will be counter-productive if Port Klang is aiming for the existing cargo that is going through Pasir Gudang. Port operators should try to catch cargo which is going across the causeway."

"We can understand the rationale to make Port Klang the national load centre as it is for the good of the country. In this aspect, Johor Port will give full support as proven by our feeder service which has grown from one to 150 containers per shipment now."

"We leave it to market forces to decide where cargo should go and we believe that where Johor Port is competitive, it will remain so," he said, adding that 80% of the port's container volume originated in Johor Baru district industrial estates.