Senior Minister of State Josephine Teo has stated that it is too early to determine the exact impact of Singapore’s economy due to the construction of Malacca’s Kuala Linggi International Port (KLIP) which will be located only 200 kilometres away from the country.
Ms Teo was replying to the question filed by Mr Saktiandi Supaat, Member of Parliament from Bishan-Toa payoh GRC who asked the Minister for Transport what will be the impact of the construction of Malacca’s Kuala Linggi International Port on Singapore’s status as a regional shipping hub, how will this impact its economy, and how can the port services be kept competitive.
The Minister said that the expansion of KLIP will reportedly add oil storage and bunkering facilities and 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,” she said.
Ms Teo said that according to the preliminary assessment, 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.
In addition, the country’s 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.
She added that 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 transhipment business.
Ms Teo stated that overall, Singapore’s attractiveness as a port of call extends beyond the provision of any one service, whether bunkering or oil storage, and stems from the ability to offer efficient end-to-end services to shipping companies.
“Having said that, Mr Saktiandi is right that we must not be complacent. Indeed, we are always looking at ways to ensure that our port remains competitive,” she said.
The Minister said that the Government have been investing in technology at the port to better meet the needs of the shipping industry and will continue to do in the future. Giving example of the new berths at Pasir Panjang Terminal Phases 3 and 4, a fully-automated yard crane system will be featured in the berths which is said to increase port productivity, adding that in time, PSA (now a private company, formerly Port of Singapore Authority) will integrate this with an automated guided vehicle system, which is currently under trial, to move the containers around the port.
She also noted that Singapore is the first port in the world to require bunker to be delivered via a mass flow metering system, which not only enhances operational efficiency, but also strengthens the integrity of the country’s bunkering services.
She said that the Government listens assiduously to feedback from the shipping companies. MPA regularly surveys shipping companies 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.
The Government has been investing significantly in manpower. MPA actively partners the industry and institutes of higher learning to grow the pool of skilled maritime professionals. These efforts include the enhancement of training programmes such as the Certificate of Competency programmes to develop local seafarers. The Government also recently introduced the SkillsFuture Earn and Learn programme for port operations officers.
However, the Minister fails to note that a majority of the shipyard workers at the bottom tier are migrant workers who can be dismissed without much reprecussion or recourse by the workers.
Ms Teo shared that the Government is currently developing a next-generation port at Tuas. With an annual capacity of up to 65 million TEUs, the Tuas terminal is expected to be the largest container terminal in the world, allowing Singapore to achieve greater economies of scale and to more efficiently handle the mega ships of the future. The port will also incorporate new automation and technologies to further boost efficiency and productivity.
But Ms Teo did not touch on the point of demand, while the Singapore port can deliver the supply but whether there demand in the first place.
The Minister ended by saying. “Singapore’s position as a leading and competitive hub port is due in large part to our efforts to aggressively and continually improve port productivity and service levels, and to build up a comprehensive port and maritime ecosystem,” and said, “We will closely monitor KLIP and other regional developments for their potential impact on Singapore, and take further measures as necessary to retain our competitive edge,”