The Asian Wall Street Journal
Malaysian port's size expected to double by '03
Tanjung Pelepas, Malaysia - A new Malaysian port that has won a major shipper away from Singapore will be doubled in size by 2003 with an investment likely to be about 2.5 billion ringgit ($657.9 million), the Chief Executive of the company that owns the port said.
Mohamad Sidik Shaik Osman of Pelabuhan Tanjung Pelepas Sdn. Bhd. said Tuesday that the number of berths at the new Tanjung Pelepas port will be increased to 12 from the initial six by the middle or end of 2003.
"We have very big plans," Mr. Sidik said after a function that Maersk Sealand, which is shifting its regional transshipment hub to Tanjung Pelepas, hosted for hundreds of its customers to show them the port near the southwest tip of Johor state, near Singapore.
Mr. Sidik said he assumes the investment for such an expansion would be "about the same" as the 2.5 billion ringgit spent on the port to date. With such expansion, Mr. Sidik said, Tanjung Pelepas could become Malaysia's biggest port.
Flemming Ipsen, Chief Executive in Asia for Maersk Sealand, said later that expansion plans would have to be formally approved by the board of Pelabuhan Tanjung Pelepas. He said he believes the board, of which he's a member, would give such approval.
Maersk put Tanjung Pelepas on the map of Southeast Asia shipping and surprised many businesspeople in Singapore by announcing in August that it would shift its regional hub to the new port from Singapore. Under the arrangement, Maersk Sealand bought 30% in the port and won the right to manage it.
PSA Corp., the owner and operator of Singapore's busy and highly efficient port, said at the time that the Maersk shift might slow its growth rates "by a couple might slow its growth rates "by a couple percentage points or so, but will not significantly impact PSA's profitability."
In printed materials give to customers Tuesday, Maersk Sealand said PSA had provided "superior service" and an efficiency few ports can match. The move to Malaysia "is therefore not driven by any shortcoming on the part of PSA," it added.
The shipper also said that cost was one factor, but there were wider reasons for the shift. "We get to control our own destiny," Mr. Ipsen said. "We do that by having ownership and management." The new facility provides "elbow room" for Maersk to expand, he added.
The regional chief of Maersk Sealand said his company has encountered "absolutely no problems" in beginning some operations at Tanjung Pelepas. (The shift of the regional hub is die to be completed by December.) He also said there will be "no problem at all" in flow of feeder ships to run between Singapore and the new Malaysian port.