S'pore races ahead with costly petrochemical plan
S'pore races ahead with costly petrochemical plan
SINGAPORE (AFP): As other recession-hit Asian economies shelve mammoth infrastructure projects, Singapore is going full steam ahead with its ambitious plan to create a new island for a world class petrochemical complex.
The S$7 billion (US$4.24 billion) project to merge seven islets southwest of Singapore into one big island was launched in 1995 but only last week did the government award the final, largest and most expensive contract for reclamation under the novel venture.
The government also said it was hastening the completion of the project, already ahead of schedule, by another two years to 2001, just before an anticipated boom cycle for the currently- depressed petrochemical industry.
According to plans, the government will amalgamate the islets into what is called Jurong Island and set up basic infrastructure for the cluster of petroleum and petrochemical industries developed by multi-national companies.
Some 36 companies already have projects worth about 20 billion Singapore dollars on the islets, whose integration now will triple their total size to about 2,800 hectares (6,918 acres) and create a self-contained petrochemical complex.
"Reclamation work on Jurong Island will go on without let," declared Lim Neo Chian, chairman of the Jurong Town Corp. (JTC), Singapore's state-run industrial estate developer which is spearheading the project.
Lim said petrochemical and chemical industries, a key component of Singapore's key manufacturing sector, was vital to Singapore, whose economic growth entered negative territory in the third quarter of 1998 for the first time in 13 years as a result of Asia's debilitating financial crisis.
"It is important for us to invest in infrastructure development now so that in an upturn we can quickly build to meet new demand," he said.
Lim's JTC last week awarded a S$1.3 billion reclamation contract -- the third and final phase in creating the island -- to a Japan-Singapore-Belgium-Holland joint venture.
It is the largest single reclamation contract ever awarded in Singapore, whose small size has often been cited as a constraint to progress.
The joint venture led by Japan's Penta Ocean Construction Co. Ltd. will reclaim 977 hectares (2,414 acres) by the end of 2001.
Work under two earlier phases to reclaim 682 hectares (1,685 acres) will be completed by March.
JTC officials said a 238-million-Singapore-dollar road link from the larger Singapore island to Jurong Island was expected to be passable to construction traffic by March and other traffic by the end of 1999. A major arterial road project on the island was also being constructed.
While Singapore proceeds with the costly project despite its economic problems, it is getting support from multinational petroleum companies which analysts earlier thought will shelve their ventures on Jurong Island because of the regional slowdown.
Among the companies is U.S. giant Exxon Corp. which confirmed this month that it would proceed with a two billion US dollar world-scale petrochemical complex on Jurong Island.
It is the single largest investment from a single company in a manufacturing project in Singapore and will create 500 professional and technical jobs.
"Exxon's commitment to such a massive project during this period of economic slowdown is a strong demonstration of its confidence in the recovery of the region," said Philip Yeo, chairman of the Singapore Economic Development Board.
To fuel the petrochemical industries mushrooming on Jurong Island, Singapore will import natural gas from Indonesia's West Natuna.
The gas is to be transported by a 640-kilometer (about 400 miles) underwater pipeline, running mostly in Indonesian waters. It was reported last week that Singapore and Indonesia had finalized the gas sales deal costing several billion dollars.
An agreement, earlier scheduled to be signed last October, is expected to be inked by January, enabling the gas pipeline to be completed by end-2000 and gas flowing by 2001.