Its strategic location, state-of-the-art technology, paper-less transactions, and efficient services would enable the port to challenge Singapore and Hong Kong soon, he said.

Realising that good port infrastructure was vital to a trading nation, he said the Government had supported the port's construction throughout the economic crisis.

"Despite problems, the port management pulled through and completed the first phase three months ahead of schedule. We hope this is a sign that Tanjung Pelepas port will experience many more successes," he said.

The Prime Minister was speaking when opening the RM2.4bil port yesterday.

Also present were Mentri Besar Datuk Abdul Ghani Othman, PTP chairman Datuk Taufik Abdullah, and state leaders as well as local and foreign port users.

Dr Mahathir said the Government spent more than RM100mil to construct roads linking the port to the North-South Expressway and another RM600mil had been allocated for the construction of a 32km railway to link the port to the national rail grid.

He also expressed confidence that the port would act as a catalyst to further boost the country's and Johor's economic growth.

In his speech, Taufik said the port's construction during the economic crisis turned out to be a blessing as contractors had to offer attractive prices in order to stay in business.

This enabled the port to be built for RM400mil less than the initial RM2.8bil budget.

Phase One, costing RM2.4bil, will have six berths measuring 360m each with a total linear wharf of 2,160m upon completion by mid-2001.

On another matter, Dr Mahathir said the Government was studying a proposal to build a naval base in Kota Kinabalu and clarified that it would be an underground base not underwater as reported.

He said the Government had yet to determine whether the underground naval base would be suitable in Malaysia.

He said the proposal had used as a model a Swedish naval base which was built in a cave because of its mountainous surroundings.

"The Government needs to look into the matter seriously to determine the need for such facility as it involves public funds," he said after opening the Tanjung Pelepas Port 2000 Seminar and Exhibition here yesterday.