ASEAN Ports Association Malaysia (MAPA)

AWAITING CLEARER PICTURE: Management goes ahead with expansion plans and moves to improve net profit

WHILE the cloud of uncertainty continues to hover over the fate of Penang Port Sdn Bhd (PPSB), it’s business as usual for the management of the country’s oldest port.

“We are just as anxious as you are about the new owner and their plans for Penang Port,” said PPSB’s managing director Datuk Ahmad Ibnihajar last Friday before a cocktail reception for the port’s users. Also present was PPSB’s chairman Datuk Seri Dr Hilmi Yahaya.

Confirming a Business Times report that PPSB is yet to be officially notified that Seaport Terminal (Johor) Sdn Bhd, owned by tycoon Tan Sri Syed Mokhtar al-Bukhary, had won the bid to privatise the 226-year-old port, he said:

“We have read that the government is still negotiating with the new owner, but we remain in the dark as to what is exactly happening.

“In the meantime, it’s business as usual for us, as we go about with our plans to expand the port and better the net profit of RM15 milllion which we recorded last year,” he said.

While projecting a modest growth rate of between two per cent and three per cent for this year, Ahmad cautioned that if the global economy worsens, growth could remain flat.

The Transport Ministry, in a written reply at the Dewan Rakyat this month, had confirmed that Seaport Terminal had won the bid to privatise PPSB. The ministry said that one of the conditions to be included in the privatisation agreement was that the successful company must bear the cost of dredging Penang Port.

It was reported that the RM351 million dred-ging scheme for the northern part of the Penang channel has yet to take off although the amount had been allocated under the 10th Malaysia Plan. The project to deepen the channel from the current 11.5m to 14.5m is vital to bring large transshipments into the port.

“We have a five-year plan to improve the port’s performance,” Ahmad said, “and the new machines (seven units of Super Post-Panamax cranes), which are currently under-utilised because of the much needed capital dredging, is yet to be carried out.

“We are not worried about who the port’s new owner will be as all we want is to get on with our job of realising the best that Penang Port can offer and for the good of the state, we should all get on with business and the sooner the capital dredging can be carried out, the better.”

Ahmad also said that it was unfair to blame his staff on the port’s performance and compare it with other ports. “It has been a challenge for PPSB to manage the expectation of port users who have been wanting to see the port grow for a long time.”

Penang Port was incorporated in 1993 as a wholly-owned subsidiary of the Minister of Finance Inc. The management and operations of the port were corporatised in 1994 under the government’s privatisation programme, and Penang Port took over all the facilities and services from the Penang Port Commission (the regulatory body for the port) which licensed Penang Port to operate, manage and maintain all port facilities and services. The 30-year concession period ends in 2023.

By: Business Times

PORT KLANG: Container volume moving through Westports Malaysia Sdn Bhd rose by 15 per cent or 6.4 million twenty foot equivalent units (TEUs) last year, compared with 5.6 million TEUs in 2010.

In a statement, Westports said the better-than-expected container volume throughput comes from both transhipment and indigenous boxes, registering positive increases of 22 per cent and 13 per cent respectively.

The robust performance in 2011 has made Westports one of the fastest growing ports in the world.

“The port has been well-known to the shipping industry as one of world’s best productivity terminal operator in container handling.

“Barring unforeseen circumstances, we expect to see a strong growth trend in volumes moving forward albeit uncertainty in eurozone, we have set a target of seven million TEUs in 2012,” Westports chief executive officer Ruben Emir Gnanalingam said.

Ruben said expansion plan to further improve the port’s capacity is underway with the current development of expanding the existing 3,700m container terminal to 4,600m, making Westports Malaysia a 10-million-TEU handling capacity port within the next two years.

The new terminal is designed to handle 18,000-TEU capacity vessel, which will be the largest container vessel in the world come 2013.

He said the company’s investment in expansion works is to accommodate the needs of its customers as well as meeting the increasing demands of domestic and international trade.

by: Business Times

Port Klang, comprising Northport and Westports, has retained its title as the country’s busiest container port in the first half of this year, with a 48.3 per cent share of the total number of containers handled by all Malaysian ports.

Its rival, Port of Tanjung Pelepas in Johor, was listed second busiest, handling 35.4 per cent of the country’s total container throughput.

Port Klang moved 4.31 million TEUs (20-foot equivalent units) of cargo in the January-June 2010 period, up 29.3 per cent from 3.33 million TEUs a year earlier, as the global economic recovery boosted cargo traffic, said Port Klang Authority (PKA) general manager Kee Lian Yong.

It handled 856,110 TEUs of exports, up 25.8 per cent from a year earlier, and the volume of imports rose 18.2 per cent to 828,082 TEUs. Transshipment volume rose 34.5 per cent to 2.62 million TEUs.

Kee said Westports led the way in the first half of 2010 with a 30 per cent increase in container volume from the same period in 2009, handling 2.65 million TEUs, while Northport saw a 28 per cent increase to 1.66 million TEUs last year.

“We are on track to achieve our stretch target of 8.4 million TEUs for the whole year, where Westports is projected to handle 5.2 million TEUs and Northport 3.2 million TEUs. The fourth quarter is traditionally the busiest quarter of the year,” Kee told Business Times in an interview.

Port Klang moved 7.31 million TEUs last year, a decline of 8.3 per cent compared with 7.97 million TEUs recorded in 2008.

“The projection for 2011 is a growth of 10 to 12 per cent in container volume (from 2010),” said Kee.

Meanwhile, in terms of tonnage handled, traffic through Port Klang in the first five months (January-May) of this year increased by 36.8 per cent to 65.54 million tonnes from 47.90 million tonnes a year earlier.

“PKA and the two terminal operators (Northport and Westports) took this time of slow-paced economy and downturn to reshape our strategies. These strategies have hastened and increased our growth even more so with the global economic recovery as can be seen by our growth percentage for the first half of 2010,” said Kee.

He added that the port authority is aware that emerging ports in Asia such as Vietnam and Sri Lanka pose stiff competition to Port Klang.

“In order for us to be competitive, we are constantly looking at our operations to ensure (we offer) effective and efficient service, are service oriented, and have cost-effective operations and a commercial competitive environment,” he said.

By: Kang Siew Li

Container traffic through Port Klang, the country’s busiest container port, fell by 8.3 per cent last year, as the global economic downturn continues to hurt the country’s exports.

The port handled 7.3 million TEUs (20-foot equivalent units), the standard measurement for shipping containers, compared with 7.9 million TEUs in 2008.

In terms of tonnage handled, traffic through the port was 133.8 million tonnes, down 8.8 per cent over the previous year.

More than half, or 61 per cent of the container volume, was from Westports, which generated 4.451 million TEUs. Northport accounted for the remaining 39 per cent or 2.858 million TEUs.

Transhipment cargo took the largest share of Port Klang’s total throughput, contributing 58 per cent, with local boxes constituting the remaining 42 per cent .

However, transhipment volume also saw a 9 per cent drop to 4.3 million TEUs for the 12 months.

Port Klang Authority (PKA) general manager Kee Lian Yong said the decline in container and cargo throughput is in line with the global trend.

“(Nevertheless,) the port’s container volume was better than our earlier forecast of a 10 per cent drop. Overall Port Klang also fared better than other major ports in the world, which saw a 10-15 per cent drop in traffic,” he told Business Times.

Kee said Port Klang is expected to post throughput growth in 2010, returning to 2008 volume of 8 million TEUs.

“We remain cautiously optimistic as the shipping community is predicting that 2010 will still be a tough year,” he added.

According to Drewry Shipping Consultants Ltd’s most recent projections, the market will have to wait until 2012 before global container port volume exceeds 2008 levels again. It expects Far East and Southeast Asian container traffic to recover faster than that in other regions.

“In 2010, the market should brace for another tough year,” Shipping Association of Malaysia chairman Ooi Lean Hin had said in an earlier interview .

By: Kang Siew Li

PORT Klang Authority (PKA) is working towards diversifying its income stream in an effort to bear the costs of running both Port Klang Free Zone (PKFZ) and its own operations.

“Of course, now we are currently self-sufficient, but with the PKFZ loan to the service, we will have to come up with more revenue streams to generate income,” PKA general manager Kee Lian Yong told Business Times recently.

He was appointed in June to replace Lim Thean Shiang, who resigned earlier amid reports of a fallout with Transport Minister Datuk Seri Ong Tee Keat over the handling of the PKFZ controversy.

Lim was handpicked to take over the running of the port by the Transport Minister.

Kee, like Lim, was a member of the corporate sector, having headed listed companies such as Metroplex and Anglo-Eastern Plantations Plc.

He said the port authority is studying all options, but is mindful of its main role as trade facilitator.

“We believe there are a lot of opportunities. I would like to do more. As a man from the property sector, I can see that we have a lot of land here, and we have to look at how we can maximise the returns on that land,” Lee said.

He said rather than just concentrating on growing its bottomline, the port authority has to also consider initiatives that will enable the industry to grow.

Kee declined to reveal the amount of cash that PKA has in its coffers, claiming that its cash reserves did not correctly reflect the financial health of the regulator, considering its huge debts, because of PKFZ.

In 2008, it was reported that PKA’s main income comes from leasing of land under the port authority. The then general manager Datin O C Phang, had said that it made RM100 million per year.

Expenses on maintaining the port area, however, were said to come up to about RM80 million per year.

On his ambition for the port, Kee said he wants to create an equitable playing field for all players in the port industry.

“I don’t want to sideline any party. In fact I hope that we can build a supply chain that benefits everybody, and also promote the growth of the port industry,” Kee said.

By Presenna Nambiar

PORT Klang Authority (PKA) has decided to withdraw its scheme to provide incentives to feeder operators linking Port Klang to regional ports, with effect from this year. It will, however, still pay out the monetary incentives due to operators for the year 2007.

For the year 2008, though, feeder incentives will be based on a new formula for qualified operators. The new formula was not specified in the statement released to the press.

The feeder incentive scheme was developed and introduced by the PKA in 2000 as part of an overall strategy to further strengthen Port Klang as a national load centre and a regional hub port.

Selected local and regional feeder operators and landbridge operators enjoy a rebate of RM20 for a 20-ft container and RM35 for 40-ft container sent through Port Klang as well as a 10 per cent discount on marine charges such as pilotage and tug boat services by the respective terminals, Northport and Westports, under the old feeder incentive scheme.

While the idea had been mooted that the costs of incentivising feeder operators be transferred to terminal operators, Northport and Westports, a PKA official told Business Times, that feeder and terminal operators have instead, been left to negotiate their respective terms.

“It is not a matter of transferring the costs to the terminal operators, up to the two parties to come to an arrangement,” the official said.

In a statement released on September 17, PKA recommended that Northport (M) Bhd and Westports Malaysia Sdn Bhd play a more active role in encouraging feeder operations in Port Klang.

The feeder incentive scheme has been suspended since 2008.

By: btimes.com.my

Malaysian ports handled 10 per cent more containers in the second quarter of the year compared to the first, reflecting a recovery in both domestic and transhipment cargo.

Container traffic at the 10 major ports rose to 3.79 million TEUs (20-foot equivalent units) from 3.44 million in the periods reviewed.

Transhipment traffic, comprising almost two-thirds of the total, was up 11 per cent to 2.48 million TEUs from 2.22 million. Transhipment cargo is that which arrives in the country and is transferred to another ship before continuing to its final destination.

Export containers showed a 10.2 per cent increase to 670,718 TEUs, while import traffic rose 4.4 per cent to 640,469 TEUs.

In the January-June period, however, container throughput fell 7.7 per cent to 7.24 million TEUs from the first half of last year. Cargo tonnage was down 11.6 per cent to 168,806 tonnes.

The Transport Ministry’s special maritime adviser, Datuk Captain Abdul Rahim Abd. Aziz, said the drop in first half container volume was in line with the performance of other ports in the Asean region, which saw 15-30 per cent declines.

“For instance, ports in the Philippines reported a decline in cargo volume of an average 20.6 per cent in the first half, while Vietnam’s port container throughput was down between 14 per cent and 30 per cent and Thailand, an average drop of 35 per cent,” he told Business Times in an interview.

“While container traffic seemed to have stabilised in the second quarter, port operators in Asean remain uncertain whether the market has hit bottom.

“At the recent Asean Ports Association (APA) working committee meeting in Kota Kinabalu, the most optimistic prediction of a recovery was from the middle of 2010,” said Abdul Rahim, who is also the APA working committee chairman.

To survive the current economic downturn, port operators have resorted to various cost-cutting strategies, including sending fewer employees overseas for trips or meetings and deferring purchases of new equipment, he added.

Port Klang, comprising Northport and Westports, solidified its position as the largest container port in the country.

Its container throughput rose 7.8 per cent in the second quarter compared to the first three months. It moved 1.73 million TEUs against 1.6 million before.

Transhipment volume was 996,508 TEUs, up 4.6 per cent from the first three months, and 57.7 per cent of Port Klang’s total throughput.

The Port of Tanjung Pelepas (PTP) in Johor continued to be the second largest container port, handling 1.47 million TEUs in the second quarter.

It recorded 17.6 per cent growth from 1.25 million TEUs in the first quarter, with 94.4 per cent of all volume coming from transhipment.

Bintulu Port saw 16 per cent growth to 57,895 TEUs from 49,875 in the first quarter.

Johor Port handled 216,744 TEUs in the second quarter, up 7.3 per cent from 201,915 in the first, thanks to the increase in transhipment and export cargo.

Penang Port was the only port to record a decline in the quarters reviewed, down 24.2 per cent to 151,165 TEUs from 199,391.

By : Kang Siew Li

Penang Port Sdn Bhd (PPSB) is throwing the ball back into the court of international shipping lines who have slammed the terminal operator for not penalising shippers that overload their cargo containers on a vessel.

PPSB chief executive officer Datuk Ahmad Ibnihajar said it was based on the appeals made by shipping lines to allow overloaded vessels into the port that resulted in no enforcement made to date.

“It’s the members of the International Ship Owners’ Association of Malaysia (ISOA) themselves who have been appealing to us and now they are blaming us for not penalising the offending shippers,” he told Business Times.

Ahmad was responding to a Business Times report where international container shipping lines operating at Penang Port slammed the terminal operator for not penalising shippers who overload their cargo containers on a vessel, saying it could lead to an accident.

ISOA secretary Fong Keng Lun said requests for enforcement have been sent to PPSB as early as June last year, but so far the calls have gone unheeded.

Ahmad said PPSB will be calling a meeting of all its users soon and ask them to decide whether they want enforcement to take effect immediately.

“The ISOA members can decide if they want us to ignore their previous appeal and support the rule that any overweight containers detected by us be not allowed to be loaded onto the vessels,” he added.

Fong had claimed that ISOA had sent repeated requests to PPSB to impose the rule that any overweight containers detected by the terminal operator will not be allowed to be loaded onto the vessels.

He said apart from the risks to human lives and the transportation operators’ equipment, some of the overweight containers were subsequently detected at transshipment ports like Hong Kong and were held back until the shipping lines had repacked the overweight containers.

The maximum permissible weight of a 20-foot container is 24 tonnes, 30.48 tonnes for a 40-foot container and up to 32 tonnes for a new-generation 40-foot container.

By : Marina Emmanuel

International container shipping lines operating at Penang Port have slammed the terminal operator for not penalising shippers who overload their cargo containers on a vessel, saying it could lead to an accident.

International Ship Owners’ Association of Malaysia (ISOA) secretary Fong Keng Lun said requests for enforcement have been sent to Penang Port Sdn Bhd (PPSB) as early as June last year, but so far the calls have gone unheeded.

In a letter dated June 30 2008, obtained by Business Times, the association wrote that some of its members had reported that overweight containers from southern Thailand regularly slipped through the checks at Penang Port and Padang Besar Terminal and were loaded onto the vessels.

“Some of these (overweight) containers were subsequently detected at transshipment ports like Hong Kong and were held back until the shipping lines had repacked the overweight containers.

“Shipping lines have to incur repacking costs and very often, due to time constraint, the on-carrying vessels have to sail off without the containers,” ISOA said, also voicing concerns over the risks to human lives and the transportation operators’ equipment.

In the same letter, the association had requested for PPSB’s support to impose the rule that any overweight containers detected by the terminal operator will not be allowed to be loaded onto the vessels.

“A circular was also sent to all ISOA members on July 2 2008, urging them not to accept overweight containers,” Fong told Business Times.

The maximum permissible weight of a 20-foot container is 24 tonnes, 30.48 tonnes for a 40-foot container and up to 32 tonnes for a new generation 40-foot container.

Fong said more recently the association made repeated pleas on May 6 and June 4, which have been ignored by PPSB.

“The letters were issued following news that the problem of overweight containers from South Thailand via Penang had resurfaced. The problem occurred with containers delivered by barge/feeder as well as by rail from Padang Besar,” he added.

Fong said ISOA’s latest calls for immediate action to stem the overweight container issue at Penang Port was also due to a March 2009 incident at Kantang Port, Thailand, which saw two barges heading for Penang Port sank due to overweight cargo.

“Today, both the Kantang terminal and barge operator are not implementing any enforcement of regulations pertaining to overweight cargo. PPSB likewise is also not implementing any check on this issue,” he said.

Fong added that the association was baffled why no action had so far been taken by PPSB on the matter, when Multimodal Freight Sdn Bhd, which manages the Padang Besar Terminal, has responded favourably to similar calls made recently.

“Is PPSB waiting for another accident to happen before it takes any action?” said Fong.

In a letter signed by Multimodal Freight general manager Azman Ahmad Shaharbi, dated May 26 2009, Azman said the company will reject containers found to be overweight and agreed not to load them onto Keretapi Tanah Melayu Bhd’s (KTMB) trains for export via Penang Port. Multimodal Freight is a wholly-owned subsidiary of KTMB.

It also pledged to install a weighing bridge for weighing all incoming containers, which is expected to be operational by the end of this year.

By : Kang Siew Li

The cruise terminal is expected to be completed by September 30, says Transport Minister Datuk Seri Ong Tee Keat

PENANG is set to welcome larger cruise ships and passenger vessels by September, when the much-delayed redevelopment of Swettenham Pier is finally completed, Transport Minister Datuk Seri Ong Tee Keat says.

The project, which took off in May 2006, was originally scheduled for completion in April last year. Among its components is an international cruise terminal.

“The cruise terminal is expected to be completed by September 30. As of April 1, the project was 86.5 per cent completed,” Ong told Business Times via e-mail.

Last year, the Transport Ministry unveiled a discrepancy of RM3.5 million in a claim for progressive payment from the contractor of the redevelopment project for the pier.

Ong said in August that the contractor had sought RM5.4 million as progressive payment in documents dated March 21 last year when the value of the work was RM1.92 million.

He said the discrepancy was discovered a few days after he took over as minister.

It is now learnt that the project is likely to only exceed its RM65 million tag slightly, and that the original contractor is seeing to the completion of the project.

Sources said the contractor was not terminated because the project would be further delayed if new tenders are to be called, and there was a likelihood of the work costing considerably more.

“However, the ministry has laid very strict conditions on the contractor now, and one of them is that all sub-contracting jobs and payment are to be made by the Penang Port Commission (PPC),” a source said.

“The PPC is seeing to the necessary arrangements to ensure that the project is back on track,” Ong said.

“Liquidated and ascertained damages of RM15,000 per day are also being imposed on the contractor for the delay,” he added.

On when the new terminal will be open, Ong said: “It will be operational when it receives the occupational certificate from the local authorities.”

By : times.com.my