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Malacca port expansion will have ‘minimal impact’ on Singapore's status as regional transhipment hub

SINGAPORE — The expansion of Malacca’s Kuala Linggi International Port (Klip) will likely have a minimal impact on Singapore’s status as a regional transhipment hub, Senior Minister of State (Transport) Josephine Teo said in Parliament yesterday, although she warned against complacency and said the Republic would take the necessary measures to retain its competitive edge.

Ships travelling through the Singapore Strait. Bloomberg file photo

Ships travelling through the Singapore Strait. Bloomberg file photo

SINGAPORE — The expansion of Malacca’s Kuala Linggi International Port (Klip) will likely have a minimal impact on Singapore’s status as a regional transhipment hub, Senior Minister of State (Transport) Josephine Teo said in Parliament yesterday, although she warned against complacency and said the Republic would take the necessary measures to retain its competitive edge.

“The expansion of Malacca’s Klip will reportedly add oil storage and bunkering facilities. The expansion is expected to be completed only within the next decade, so it is still too early to determine the exact impact on Singapore’s economy. Our preliminary assessment, however, is that Klip’s planned oil storage capacity of 1.5 million cubic metres is not big relative to Singapore’s current capacity of 20.5 million cubic metres,” she said.

“In addition, our position as a regional bunkering and oil storage hub is anchored by a strong ecosystem of oil refineries and oil traders, and by the high volume of ships calling at Singapore for various services.

“As for the container-handling business, Klip’s expansion does not appear to include any such facilities. The expansion should therefore have minimal impact on Singapore’s container transshipment business.”

She was replying to a question from Bishan-Toa Payoh GRC MP Saktiandi Supaat on how Klip would affect Singapore’s standing as a regional shipping hub. Ms Teo said Mr Saktiandi’s question is a timely reminder that Singapore “must not be complacent”.

Financed mainly by Chinese investors, the RM12.5 billion (S$4.02 billion)expansion will allow Klip to host the world’s biggest tankers, offering storage, repair and refuelling services. Construction is expected to begin this quarter and take about 10 years.

Ms Teo said Singapore’s attractiveness as a port extends beyond the provision of any one service, whether bunkering or oil storage, and stems from its ability to offer efficient end-to-end services to shipping companies.

And, to stay competitive, Singapore is constantly investing in technology to better meet the needs of the industry, Ms Teo said, pointing to the new berths at Pasir Panjang Terminal phases 3 and 4 which feature a fully automated yard crane system that raises port productivity.

Singapore also places priority on feedback from shipping companies. “The Maritime and Port Authority of Singapore (MPA) regularly surveys them on how they view supporting port services in Singapore, such as towage and pilotage services, compared to those at other ports. This enables MPA to systematically identify and address any shortcomings, and keep standards high.”

Ms Teo said shipping companies are “always driven firstly by commercial considerations. They are not going to call at our port because of altruism or because they like us. So the first thing we must do is to ensure that the product that we offer to them, the services we offer, meet their requirements and allow them to make a better goal of the commercial considerations.”

All the activities and significant investments that Singapore are making are geared towards ensuring that shipping companies choose Singapore, hence efficiency and the ability to deliver high-quality reliable service consistently are high priorities, she said.

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