LAND BRIDGE LINK BETWEEN PENANG AND SONGKHLA (Effect on Singapore)

Mr Low Thia Khiang asked the Minister for Communications if he will give an assessment on whether the proposed land bridge link between Penang in Malaysia and Songkhla in Thailand will affect Singapore.

Mr Mah Bow Tan: Mr Speaker, Sir, Malaysia's proposal for a Penang-Songkhla land bridge was raised within the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) economic cooperation framework. We do not know at this stage the details of the project proposal. However, it is clear that the envisoned project is a massive one, and will involve substantial investments in roads, pipelines and port infrastructure. The financial viability of the project will also depend on how competitive the costs of unloading, transportation and re-loading of cargo are, in relation to the existing alternatives. As the preliminary feasibility study into the project has not yet been completed, it is too early for me to comment on the project's impact on Singapore.

The land bridge project is part of a wider trend in the Asia-Pacific. With rapid economic growth, the region will continue to experience an increase in container traffic. The volume of containers handled by PSA alone has been rising at an average rate of 21% per annum between 1984 and 1994. Emerging ports in China, Indochina and as far away as the Middle East are understandably eager to compete and tap a share of the region's dynamic growth.

PSA is well-positioned to grow with the region. Singapore's strength is our ability to provide the shipping community a total service capability at competitive prices. This is due to our excellent infrastructure and active investment in anticipation of future infrastructure needs, as well as our ongoing efforts to maintain high productivity growth rates.

The completion of Brani Terminal, and the upgrading of Tanjong Pagar and Keppel Terminals, will meet PSA's capacity requirements fully by 1997. PSA has already begun to develop a new container terminal at Pasir Panjang which will commence operations by 1998, and eventually double PSA's total handling capacity from 16 million TEUs (Twenty-Foot Equivalent Units) to about 34 million TEUs by the year 2007.

PSA is also striving to keep our international port productivity ranking at number one through skills upgrading programmes and by increasing port automation. For example, state-of-the-art equipment like Overhead Bridge Cranes and Automated Guided Vehicles are being tested for the new terminal to enhance PSA's technological edge and operational efficiency. By adopting a farsighted and proactive approach, PSA is poised and ready to meet the challenges of tomorrow.

Mr Low Thia Khiang: Sir, if the land bridge project should eventually proceed, would the Minister be able to assess how much it would affect the port of Singapore?

Mr Mah Bow Tan: Sir, as I indicated in my answer, it is very difficult for us at this stage to give an answer to that question. Partly, it is dependent on how much the actual cost will be incurred by operators using that route, and how much will be the comparable cost using the port of Singapore. Secondly, the pie will grow. The region is growing and it is quite possible that eventually when the land bridge is built, if it is found feasible, it is quite possible that there will be sufficient business for both the land bridge as well as the port of Singapore. But all these are hypothetical answers because, as I said, we would have to, first of all, determine whether that particular project is feasible and what are the details involved in building such a massive infrastructure.