REDUCTION OF WAREHOUSING AND PORT TARIFFS

Mr Tay Beng Chuan asked the Minister for Communications whether his Ministry will request PSA Corporation Ltd to reduce its warehousing and port tariffs to help Singapore retain its competitiveness in the face of the regional currency crisis.

Mr Mah Bow Tan: PSA was corporatised in October 1997. Under the Port of Singapore Authority (Dissolution) Act 1997, the port charges for domestic cargo handled by PSA Corporation are regulated by the Maritime and Port Authority (MPA). PSA has to justify any increase in its domestic tariffs to MPA before implementing any tariff hikes. To date, PSA Corporation has not sought to increase its domestic cargo tariffs. In fact, local stevedore rates, which is the major component in domestic cargo tariffs, have decreased by 25% over the last 20 years.

To keep port costs down, MPA reduced port dues for container ships by 20% since May 1996. PSA and MPA also recently announced the waiver of overside bunker wharfage charges which will result in a cost saving of $17 million a year for port users.

In the area of warehousing, PSA Corporation is one of many warehouse lessors in Singapore and port users have a large pool of warehouse operators to choose from. PSA has also been responsive to prevailing market conditions. From March 1998, PSA has lowered rents at Keppel Distripark by 10%. It has also been granting its tenants further rebates on their leases.

In the transhipment business, PSA Corporation faces keen competition from other ports in the region and will need to offer good value-for-money and quality services at attractive rates in order to stay competitive.

I would like to assure the Member that the MPA and PSA Corporation are both keenly aware of the need to keep its port tariffs competitive in order to help Singapore remain a good place to do business.