Singapore to boost port competitiveness

Singapore to boost port competitiveness

Singapore is likely to confirm plans for overseas shipping lines to have a stake in port operator PSA Corp., in a major policy announcement aimed at containing a growing threat from Malaysia as a shipping hub.

The idea was first mooted in April, along with an 80 million dollar (US$44.4 million) plan to beef up competitiveness as shipping lines begin to abandon Singapore in favor of Malaysia's neighboring Port of Tanjung Pelepas (PTP).

Transport Minister Yeo Cheow Tong told Channel NewsAsia that Prime Minister Goh Chok Tong would make a major announcement on shipping strategy at the PSA's 30th anniversary dinner on Friday.

There is wide market speculation Goh will confirm the shareholding idea, first floated in April, and while Yeo would not go into specifics of the speech he said selling stakes in PSA is "definitely feasible".

Singapore is one of the world's busiest ports, and Goh has said if the shareholding option is adopted "when PSA prospers, the shipping lines will get a heavy rebate".

Singapore's position as Southeast Asia's regional transhipment hub is facing serious competition from PTP which has already wooed away two of PSA's biggest customers, Danish line Maersk and Taiwan's Evergreen Marine Corp.

The young Malaysian port, which only began operations in 1999, reportedly offered rates sharply lower than those of PSA and gave Maersk a 30 percent equity stake offer.