Impact on Singapore of Construction of Kuala Linggi International Port in Malacca

Mr Saktiandi Supaat asked the Minister for Transport (a) what will be the impact of the construction of Malacca's Kuala Linggi International Port on our status as a regional shipping hub; (b) how will this impact our economy; and (c) how can our port services be kept competitive.

The Senior Minister of State for Transport (Mrs Josephine Teo) (for the Minister for Transport): Mdm Speaker, the expansion of Malacca's Kuala Linggi International Port (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. 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 transhipment port.

Overall, Singapore's attractiveness as a port of call extends beyond the provision of any one service, whether it be bunkering or oil storage, and stems from our ability to offer efficient end-to-end services to shipping companies.

Having said that, Mr Saktiandi's question is a timely reminder that we must not be complacent and must ensure that our port remains competitive. How do we do so?

First, we have been and will continue to invest in technology at the port to better meet the needs of the shipping industry. For example, the new berths at Pasir Panjang Terminal Phases 3 and 4 feature a fully-automated yard crane system, which raises port productivity. In time, PSA will integrate this with an automated guided vehicle system, which is currently under trial, to move the containers around the port. Singapore is also the first port in the world to require bunker to be delivered via a mass flow metering system. This not only enhances operational efficiency, but also strengthens the integrity of our bunkering services.

Second, we listen 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.

Third, we have 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. Recently, the introduction of a SkillsFuture Earn and Learn programme for port operations officers.

Finally, we are 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 us 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.

Mdm Speaker, 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 sector ecosystem. We will closely monitor KLIP and other regional developments and their potential impact on Singapore, and take further measures as necessary to retain our competitive edge.

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mdm Speaker, I thank the Senior Minister of State for answering the question. I am glad to hear that the Ministry of Transport and also the Port Expansion plans have included strategies, going forward, in terms of enhancing competitiveness and taking Linggi into consideration.

My question, following up to the answer − with regard to commercial considerations, in terms of shipping companies, expansion plans in the future with evolving technologies, if Linggi become successful, the Malacca Getway project becomes successful, for example, in a scenario such as that, would there be commercial considerations such that shipping companies may actually − like what we have seen from the Johor port moving up towards Linggi as well —”

Mdm Speaker: Mr Saktiandi, do you want to put your question?

Mr Saktiandi Supaat: So, that is my question. In terms of commercial considerations, have that been taken into consideration?

Mrs Josephine Teo: Thank you, Mdm Speaker. In response to Mr Saktiandi's question, I think our working assumption is that the 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 that we offer to them, meet their requirements, and in fact, allow them to make a better go of their commercial considerations than if they were to call at other ports. That is the primary consideration.

So, all of the activities and the significant investments that we are making are geared towards ensuring that commercially, the considerations will tilt the calculations of the shipping companies in favour of Singapore. Therefore, efficiency is of very high priority, and I think also, the ability to deliver high quality service in a very consistent and reliable manner. That is also what counts.

Furthermore, I think the shipping companies will also consider if, for example, there are instances where the services have to be curtailed or if they are not up to expectations, what is the recovery plan that the port operator is able to offer? I think those are the primary considerations and it is in these areas that we must continue to put our emphasis on, in order to secure our position as a competitive hub port.