Malaysia's Port of Tanjung Pelepas, which competes with neighbouring Singapore for South-east Asia's sea freight, said it's obtained a loan from a government bank as part of its RM1.3 billion (S$570 million) expansion plan.

Tanjung Pelepas borrowed RM741 million over 15 years from Bank Pembangunan & Infrastruktur Bhd, chief executive Mohd Sidik Shaik Osman said in a speech in Kuala Lumpur yesterday. The port will handle as much as 10 per cent more containers this year compared with last year, he said.

With the expansion, 'we will continue to promote Pelepas as a regional hub, and attract more main liners and individual services to Pelepas and create a dynamic regional distribution and consolidation centre for logistics', he said.
Tanjung Pelepas, half-owned by MMC Corp, has eight container berths of 360 metres each in length. The port handled 2.08 million containers in the first half, 3.4 per cent more than last year. Container traffic is likely to increase to a record this year, helped by lower rates and Asia's growing trade with the US and Europe.

The port, which can handle 6 million 20-foot containers a year, reported a record traffic of 4.02 million boxes last year after volume grew 15 per cent. It's building two more berths scheduled for completion in the middle of 2006 and ordering quay cranes and load movers, Mr Mohd Sidik said.

The port, in southern Malaysia's Johor state, last month said it expects to handle a record number of containers this year, helped by lower rates and increased trade.

Tanjung Pelepas, 5.4 km northwest of Singapore, was opened in 1999 to compete with the island-state's port. It has already attracted Maersk Sealand, a unit of Denmark's AP Moeller-Maersk A/S, and Taiwan's Evergreen Marine Corp to shift their South-east Asian hubs to the Malaysian port because of cheaper charges.

The port also expects 'double-digit' growth next year, Mr Mohd Sidik told reporters in Kuala Lumpur.

Tanjung Pelepas's container volumes last year accounted for 36 per cent of the total 11.1 million processed at Malaysia's major ports, according to the Ministry of Transport. About 90 per cent of the containers handled at Tanjung Pelepas are for transshipment to other locations.

Maersk purchased a 30 per cent stake in Tanjung Pelepas in 2000 when the shipping line moved its operations to the Malaysian port from Singapore. About 70 per cent of traffic at Tanjung Pelepas port comes from Maersk, Mr Mohd Sidik said last month.

Bank Pembangunan's loan is the third facility extended to Tanjung Pelepas, raising the total amount to RM1.89 billion, the bank's managing director Abdul Rahim Mohd Zin told reporters in Kuala Lumpur. - Bloomberg