Singapore could be bypassed as new links alter regional trade routes
By Leslie Lopez, Regional Correspondent In Kuantan, The Straits Times, 22 Dec 2016
In a remote nook along Peninsular Malaysia's east coast, millions of tonnes of sand are being dredged up from the South China Sea to get Kuantan Port ready for the country's priciest infrastructure project yet: a RM55 billion (S$17.7 billion) railway link financed by China.
The East Coast Rail Line project (ECRL) will connect ports on the east and west coasts of Peninsular Malaysia and could alter regional trade routes which currently ply between the busy Strait of Malacca and the South China Sea via Singapore, officials say.
This potential game changer gives a glimpse of China's ambitions to expand its economic clout in Asia and beyond. And it explains why land is being reclaimed at such a frenzied pace at Kuantan Port.
By Leslie Lopez, Regional Correspondent In Kuantan, The Straits Times, 22 Dec 2016
The East Coast Rail Line project (ECRL) will connect ports on the east and west coasts of Peninsular Malaysia and could alter regional trade routes which currently ply between the busy Strait of Malacca and the South China Sea via Singapore, officials say.
This potential game changer gives a glimpse of China's ambitions to expand its economic clout in Asia and beyond. And it explains why land is being reclaimed at such a frenzied pace at Kuantan Port.
The port owners, Malaysia's construction powerhouse IJM and China's Beibu Gulf Port Group, are spending more than RM1.2 billion to reclaim 40ha of land. The Malaysian government has provided another RM1.08 billion to complete a 4km breakwater, to protect the harbour.
The massive port expansion will feature a 1km-long berthing complex that will feed industries in nearby industrial zones earmarked specially for Chinese manufacturing concerns.
Officials say the upgrading of Kuantan Port, which will be completed by mid-2018, is only one part of what is shaping up to be Malaysia's most expensive infrastructure undertaking.
The massive port expansion will feature a 1km-long berthing complex that will feed industries in nearby industrial zones earmarked specially for Chinese manufacturing concerns.
Officials say the upgrading of Kuantan Port, which will be completed by mid-2018, is only one part of what is shaping up to be Malaysia's most expensive infrastructure undertaking.
The port, which began operations in 1984, is central to the ECRL, which will depend on Chinese train technology and funding.
The proposed 620km electrified railway line will snake its way from Tumpat, located near Malaysia's north-eastern border with Thailand, down the coast to Kuantan Port, before cutting through the mountainous central region to Port Klang, Malaysia's biggest port.
China has also proposed building a new port in Malacca, also on the west coast, but Malaysian government planners say financing for the project has yet to be finalised.
Funding for the ECRL, on the other hand, has been secured, with 85 per cent of the project financed with soft loans from Beijing.
While the entire stretch is set to take more than a decade to build, government planners say that top priority will be placed on the construction of the 250km section that will connect Kuantan Port with Port Klang. When completed, the ECRL would become a major land bridge for trade in and out of Asia.
"Cost issues aside, this new network will create new alternative routes to boost trade for ASEAN, with Malaysia as the base; and why this has to be taken seriously is because the Chinese have a direct interest in the (Kuantan) port and the rail link," said Mr G. Durairaj, managing director of maritime and logistics consultancy PortsWorld.
If everything comes together as planned, the new links could bypass Singapore and offer exporters new options to reach markets in North Asia. Exports from North Asia could also bypass looping around Singapore to get to the busy Strait of Malacca, proponents of the project argue.
Mr Jaafar Ismail of Fergana Ventures, a Malaysian advisory firm that specialises in infrastructure and resource-based projects, notes that the Port Klang to Kuantan Port land bridge could provide a "significant resolution" to China's over-reliance on the Malacca Strait, what it calls the "Malacca Dilemma". Today, about 80 per cent of Chinese energy needs pass through that narrow waterway.
"China clearly considers ASEAN as the southern hinterland, its new manufacturing base and a huge market," said Mr Jaafar, adding that the land bridge will make any plans for a waterway on Thailand's Isthmus of Kra redundant in the medium term.
While the entire stretch is set to take more than a decade to build, government planners say that top priority will be placed on the construction of the 250km section that will connect Kuantan Port with Port Klang. When completed, the ECRL would become a major land bridge for trade in and out of Asia.
"Cost issues aside, this new network will create new alternative routes to boost trade for ASEAN, with Malaysia as the base; and why this has to be taken seriously is because the Chinese have a direct interest in the (Kuantan) port and the rail link," said Mr G. Durairaj, managing director of maritime and logistics consultancy PortsWorld.
If everything comes together as planned, the new links could bypass Singapore and offer exporters new options to reach markets in North Asia. Exports from North Asia could also bypass looping around Singapore to get to the busy Strait of Malacca, proponents of the project argue.
Mr Jaafar Ismail of Fergana Ventures, a Malaysian advisory firm that specialises in infrastructure and resource-based projects, notes that the Port Klang to Kuantan Port land bridge could provide a "significant resolution" to China's over-reliance on the Malacca Strait, what it calls the "Malacca Dilemma". Today, about 80 per cent of Chinese energy needs pass through that narrow waterway.
"China clearly considers ASEAN as the southern hinterland, its new manufacturing base and a huge market," said Mr Jaafar, adding that the land bridge will make any plans for a waterway on Thailand's Isthmus of Kra redundant in the medium term.
But Malaysia's opposition leaders do not share this optimism, arguing that the rail network is an expense that Malaysia's debt-laden economy can ill afford. They further note that the project only underscores Prime Minister Najib Razak's growing reliance on China to help lift the Malaysian economy.
"The government has to explain why this sudden reliance on China and how it will benefit the local economy," said Mr Mujahid Rawa, a veteran MP from Parti Amanah Negara, a splinter party of Islamist party Parti Islam SeMalaysia.
He said the public perception is that "the PM is hiding behind the Chinese because of 1MDB". 1MDB refers to the funds misappropriation scandal involving state-owned 1Malaysia Development Berhad.
Despite the brickbats, Mr Najib's government is pushing ahead with the planned ECRL, which Kuala Lumpur says will be a catalyst for regional growth and help narrow the disparity in levels of economic development between the bustling west coast of Peninsular Malaysia and the more rural east coast states, particularly Kelantan and Terengganu.
During a recent trip to Beijing, Mr Najib's government signed an agreement to award the construction of the ECRL to China Communication and Construction Company, a publicly traded state-owned entity, in a deal that will be financed by a soft loan from the Export-Import Bank of China.
Construction on the ECRL will begin next year and economists say the project could be a major boon for Malaysia's sluggish domestic construction sector.
Signs of a pick-up in economic activity abound in the surrounding areas of Kuantan Port, which is already home to several large petrochemical installations, such as BASF Petronas Chemicals, a joint venture between Malaysia's state-owned oil corporation and Germany's BASF.
The construction of new roads and flyovers from the port complex to a nearby industrial park is almost complete, and government officials say the eastern economic region has already attracted more than RM8.9 billion in investment, mainly from manufacturing concerns from China.
They include investment from Beijing Goldenway Biology Tech Co, the world's largest bio-humic acid producer, and a RM3.5 billion steel facility by Guangxi Beibu Gulf Iron & Steel Investment Co.
Kuantan Port's general manager Mazlim Husin told The Straits Times that describing the planned steel facility to visitors helps to provide a sense of scale to the undertaking around this industrial region.
The integrated steel mill will occupy a 287ha site - half the size of Sentosa island - and have an annual production of 3.5 million tonnes.
"This is the sheer size of just one project and the ECRL will attract more of these large ventures," Mr Mazlim said.
Malaysia's Port Klang Authority (PKA) wants to build a giant port on an island next to the country's largest port, clashing with plans for two big ports coming up in nearby Malacca, about a two-hour drive away.
The RM200 billion (S$64 billion) project mooted by the PKA will be built on Pulau Carey, which, at 13,000ha, is about 25 times the size of Singapore's Sentosa Island.
PKA chairman Kong Cho Ha said a new port is necessary to compete in the industry and also to vie for a bigger share of the container cargo trade from Singapore, The Star daily reported yesterday.
Officials have also said that Port Klang, the largest in Malaysia, is reaching its maximum capacity.
Some analysts question the need for a new port, especially one intended to compete with Singapore.
** Indonesia aims for a slice of Singapore's sea cargo traffic
Govt to consolidate cargo from elsewhere at Jakarta port
By Francis Chan, Indonesia Bureau Chief In Jakarta, The Straits Times, 26 Jan 2017
Indonesia plans to beef up its port services by consolidating cargo traffic from various facilities across the country at Tanjung Priok in North Jakarta, its largest and most advanced seaport.
The move to centralise transshipment activities is aimed at taking over a slice of the market currently dominated by Singapore, The Jakarta Post reported yesterday.
Transportation Ministry official Antonius Tonny Budiono said the government and units of state- owned port operator Pelabuhan Indonesia (Pelindo) are meeting to discuss plans to create an "integrated chain port".
This involves consolidating the export of cargo from ports such as Bitung, in North Sulawesi, and Sorong, in West Papua, at Tanjung Priok, which now handles about half of the country's export shipments.
Mr Antonius, who is director-general of sea transportation, said this will improve efficiency and make Tanjung Priok more attractive for shipping companies.
"The transshipment sector has long been dominated by Singapore (but) if the commodities originate in our country, why can't we handle them?" he told The Jakarta Post.
His comments followed recent reports that Malaysia's Port Klang Authority (PKA) plans to build a new seaport, next to Port Klang, the country's largest port.
The RM200 billion (S$64 billion) project, located on Pulau Carey, is critical if Malaysia wants to compete with Singapore for a larger share of the cargo trade, PKA chairman Kong Cho Ha had said.
Singapore, widely known as the world's busiest transshipment hub, accounts for almost a seventh of total global container transshipment.
Figures from the Maritime and Port Authority showed that Singapore's annual container throughput held steady last year at 30.9 million TEUs, or 20ft equivalent units. By comparison, container traffic at Tanjung Priok over the same period was 5.4 million TEUs, up from 5.2 million TEUs in 2015.
President Joko Widodo has made improving Indonesia's maritime infrastructure a key priority since he was elected in 2014.
Plans to jointly develop a deep- sea port in Patimban, West Java, were also brought up during a bilateral meeting between Mr Joko and Japanese Prime Minister Shinzo Abe in Bogor this month.
Indonesia, however, has also suffered setbacks in the sector, most recently when a plan to develop an international port in North Sumatra was stalled earlier this month.
Industry players and experts remain sceptical about the move, adding that the plan to consolidate cargo traffic at Tanjung Priok will be unlikely to have a negative impact on Singapore in the immediate future. This is because Singapore is still more strategically located than Tanjung Priok port.
Veteran industry analyst Christianto Wibisono called it a massive endeavour that will involve a sea change not only in port operations but also how business is conducted in Indonesia.
"Indonesia must ensure costs are lower and the service, faster... Unloading at Tanjung Priok port can now take up to five days, multiple times that in Singapore," he said. "So, sure it's doable but it is a very big challenge."
An Indonesian government official familiar with the industry said yesterday that Indonesia's "stance is to try to complement, not to compete" against its close neighbour.
Speaking on condition of anonymity, he added: "It is not realistic. Singapore is the world's No. 1 in terms of the ease of doing business, and No. 3 in terms of innovation."
*** East Coast Rail Link: Malaysia touts rail trade route as rival to Singapore
Railway linking east to west coast will allow projected 53 million tonnes of cargo to bypass Republic by 2030, it says
By Shannon Teoh, Malaysia Bureau Chief In Kuala Lumpur, The Straits Times, 10 Aug 2017
Malaysia has hailed an upcoming railway linking its east coast to Port Klang on the west coast as an "alternative trade route", claiming that a projected 53 million tonnes of cargo will bypass Singapore annually by 2030.
At a ground-breaking ceremony for the East Coast Rail Link (ECRL) attended by a high-level Chinese delegation yesterday, Prime Minister Najib Razak said the rail link "is a high-impact project that will seamlessly link the Klang Valley with the states of Pahang, Terengganu and Kelantan".
The RM55 billion (S$17.5 billion) rail link, which will be built and funded by Chinese state firms, is slated for completion in 2024.
"The viability of the ECRL is undisputed as it is estimated that 5.4 million passengers and 53 million tonnes of cargo will use the ECRL service annually by 2030 as the primary transport between the east and west coast," Datuk Seri Najib said at the event in Kuantan, capital of his home state Pahang.
It is in Kuantan that a new deepwater port, also jointly developed with China, will be joined to the west coast via the ECRL to Malaysia's main port in Klang. "Hence, regional trade routes mainly centred on the busy Strait of Malacca and the South China Sea via Singapore, may leverage on the ECRL transportation, which can cater for the movement of bulky items in large volumes at lower cost," he added.
Mr Najib said the 668km line would boost the eastern region - which lags behind the rest of the country - raising economic growth by 1.5 per cent a year.
China's State Councillor Wang Yong, head of the Chinese delegation, said the electrified rail project would promote regional connectivity and was a display of bilateral economic cooperation.
Analysts said China is "keeping all options open" in securing trade routes across the Indian Ocean to its shores.
Mr Jaafar Ismail of Fergana Ventures, a Malaysian advisory firm that specialises in infrastructure and resource-based projects, previously told The Straits Times that the Port Klang to Kuantan Port "land bridge" could provide a "significant resolution" to China's over-reliance on the Malacca Strait.
Still, analysts note that the 53 million tonnes Kuala Lumpur hopes will be carried via the ECRL each year is less than 10 per cent of what the Port of Singapore handles now.
"Singapore will still be very important for the short to medium term. It is arguably still one of the most efficient ports with massive carrying capacity," senior fellow Johan Saravanamuttu of the S. Rajaratnam School of International Studies told The Straits Times.
The ECRL, which will have 12 passenger, three freight and seven combined stations, will go north from Kuantan, Pahang, to the state of Kelantan near the Thai border.
The state-owned China Communications Construction Company will build the line, with China Exim Bank providing 85 per cent of the capital at an interest rate of 3.5 per cent.
The opposition in Malaysia has argued that the rail link is unlikely to generate sufficient revenue to repay the loan from China, while critics say Malaysian firms will not reap the benefits of the project.
However, Mr Najib said China had agreed to set aside 30 per cent of the project for local contractors.
The opposition Pakatan Harapan coalition said yesterday that the resources poured into the new rail link are at the expense of the 6,000 rail workers working for the national rail company, which will not be operating the new project.
A statement signed by coalition members noted the rail link will not be owned by the national rail company but by a new firm wholly owned by the Ministry of Finance.
About the line
The Straits Times, 10 Aug 2017
What: An electrified railway line connecting the east and west coast of Peninsular Malaysia. Cost: RM55 billion (S$17.5 billion).
Funding: 85 per cent to be financed by soft loan from state-owned Exim Bank of China, at 3.25 per cent interest. Remaining 15 per cent to be funded through sukuk, or Islamic bonds, from Malaysian investment banks.
Route: 22 stations along the 688km line from Tumpat in Kelantan to Port Klang in Selangor, via Kuantan Port.
Travel time: Four hours. The journey by road takes between seven and 12 hours.
Built by: State-owned China Communications Construction Company. It is to be completed by 2024.
Impact: An estimated 5.4 million passengers and 53 million tonnes of cargo will use the service annually by 2030. It is expected to create 80,000 jobs and increase the gross domestic product of east coast states - Kelantan, Terengganu and Pahang - by 1.5 per cent.
SOURCES: BERNAMA, THE STAR/ASIA NEWS NETWORK
**** August 2018 ****
East Coast Rail Link and pipeline projects with China to be deferred: Malaysian PM Mahathir Mohamad
He says China understands KL's reasons for shelving East Coast Rail Line and gas pipelines
By Goh Sui Noi, China Bureau Chief In Beijing, The Straits Times, 22 Aug 2018
Two Chinese mega projects in Malaysia would be deferred, with Beijing's agreement, Prime Minister Mahathir Mohamad told a press briefing yesterday at the end of a five-day visit to China.
He was referring to the US$20 billion (S$27 billion) East Coast Rail Line (ECRL) and two gas pipelines worth US$2.3 billion.
"It will be deferred until such time we can afford, and maybe we can reduce the cost also if we do it differently," Tun Dr Mahathir said.
"It's all about borrowing too much money which we can't afford, can't repay, and also we don't need those projects for Malaysia at this moment," he added.
Dr Mahathir, who returned as prime minister for the second time after the Pakatan Harapan coalition scored a historic win in a general election in May, has denounced what he called the profligate spending of the previous administration on big-ticket items such as the Chinese projects as well as a high-speed rail project with Singapore.
Dr Mahathir also wants to negotiate a deferment of the rail project with the Singapore Government. Transport Minister Khaw Boon Wan met Malaysia's Economic Affairs Minister Mohamed Azmin Ali this month on the issue and they agreed to continue discussions.
Dr Mahathir yesterday said he had explained to the Chinese his reasons for halting the projects and they understood and agreed.
The Chinese Foreign Ministry at its regular press briefing, while not addressing the issue directly, said it was inevitable that there should be problems or different points of view in the bilateral cooperation.
"These issues should be resolved properly through friendly consultations and from the standpoint of the long-term development of friendship and bilateral relations between the two countries," said ministry spokesman Lu Kang.
He noted that China was now Malaysia's largest trading partner.
Dr Mahathir yesterday witnessed the signing of a memorandum of understanding between Malaysia's Sime Darby and China's Cofco on cooperation to develop downstream applications of palm oil.
"This is the sheer size of just one project and the ECRL will attract more of these large ventures," Mr Mazlim said.
Port Klang plans giant facility to compete with Singapore, but analysts sceptical
By Trinna Leong, Malaysia Correspondent In Kuala Lumpur, The Straits Times, 10 Jan 2017
By Trinna Leong, Malaysia Correspondent In Kuala Lumpur, The Straits Times, 10 Jan 2017
The RM200 billion (S$64 billion) project mooted by the PKA will be built on Pulau Carey, which, at 13,000ha, is about 25 times the size of Singapore's Sentosa Island.
PKA chairman Kong Cho Ha said a new port is necessary to compete in the industry and also to vie for a bigger share of the container cargo trade from Singapore, The Star daily reported yesterday.
Officials have also said that Port Klang, the largest in Malaysia, is reaching its maximum capacity.
Some analysts question the need for a new port, especially one intended to compete with Singapore.
"Creating another port that runs separately does not make sense. That is just bringing about excess capacity," said Mr G. Durairaj, managing director of maritime and logistics consultancy PortsWorld.
A World Bank report commissioned by the government in 2015 said a new port on Malaysia's west coast is not necessary, as existing facilities have yet to reach capacity, according to sources.
Mr Durairaj said that a new port in Selangor would have only a "minimal impact" on Singapore's shipping sector.
Analysts see little chance that a new port would draw clients away from Singapore, pointing to factors such as critical mass and customer loyalty incentives.
They also note that current ports in Johor, which are closer to Singapore, have not managed to make too big of a dent, adding that the global container-shipment industry has reached a plateau.
On the other hand, having several Malaysian ports situated close to one another along the Malacca Strait would lead to them eating into one another's pie. "There will be excess capacity in a competitive environment, and that will eat into the current market share," Mr Durairaj told The Straits Times.
The movers behind the Pulau Carey project are past and present ranking members of the Malaysian Chinese Association (MCA), which is part of the Umno-led Barisan Nasional coalition. Tan Sri Kong is an MCA member and former transport minister. The Chinese-based party owns a majority stake in The Star.
Transport Minister Liow Tiong Lai, who is MCA president, proposed last year that China invest in Pulau Carey's deep-sea port. He revealed that talks were in place between his ministry and the China Merchants Group.
A Chinese investor for Pulau Carey's port would fit into the big picture of China's One Belt, One Road initiative, Affin Hwang Capital's analyst Aaron Kee said.
"They (China) have an interest in safeguarding the trade flow and to bypass Singapore," Mr Kee said, adding that China's stake in Kuantan Port and involvement in building the East Coast Rail Line would indicate an interest in Pulau Carey as an extension of Port Klang.
But just 86km south is the RM12.5 billion Kuala Linggi International Port in Malacca, which is expected to serve the oil and gas industry. It got the go-ahead to begin construction in the first quarter of this year.
Then there is Melaka Gateway, 126km from Pulau Carey, a project costing RM43billion and involving energy giant PowerChina International. There are plans to build a deep sea port and a cruise terminal.
Experts say new ports sprouting in Malaysia as growth plateaus could mean only one thing.
"I won't rule out a migration of activities. They have to contend with intra-port competition," said Mr Durairaj.
Experts say new ports sprouting in Malaysia as growth plateaus could mean only one thing.
"I won't rule out a migration of activities. They have to contend with intra-port competition," said Mr Durairaj.
* Parliament: Malacca port's impact on Singapore 'minimal'
Oil storage capacity is lower and it doesn't seem to offer container handling services: Josephine Teo
By Rachael Boon, The Straits Times, 10 Jan 2017
A new international port being built in Malacca will have minimal impact on Singapore as its planned oil storage capacity will be far lower than what is on offer here, Senior Minister of State for Transport Josephine Teo told Parliament yesterday.
She said the Kuala Linggi International Port (Klip) will be able to store 1.5 million cubic metres of oil, while Singapore has a capacity of 20.5 million cubic metres.
Mrs Teo was replying to Mr Saktiandi Supaat (Bishan-Toa Payoh GRC), who asked about Klip's impact on Singapore's status as a regional shipping hub and its economy, and how port services here will stay competitive.
The minister said Singapore's position as "a regional bunkering and oil storage hub is anchored by a strong eco-system of oil refineries and oil traders, and by the high volume of ships calling at Singapore for various services".
She noted that Klip, which will add oil storage and bunkering facilities, does not seem to offer container handling services, and that will mean minimal impact on Singapore's container transhipment port.
New berths at Pasir Panjang Terminal Phases 3 and 4 have fully automated yard crane systems that will be integrated with an automated guided vehicle system - now on trial - to move the containers around the port, she said.
Oil storage capacity is lower and it doesn't seem to offer container handling services: Josephine Teo
By Rachael Boon, The Straits Times, 10 Jan 2017
A new international port being built in Malacca will have minimal impact on Singapore as its planned oil storage capacity will be far lower than what is on offer here, Senior Minister of State for Transport Josephine Teo told Parliament yesterday.
She said the Kuala Linggi International Port (Klip) will be able to store 1.5 million cubic metres of oil, while Singapore has a capacity of 20.5 million cubic metres.
Mrs Teo was replying to Mr Saktiandi Supaat (Bishan-Toa Payoh GRC), who asked about Klip's impact on Singapore's status as a regional shipping hub and its economy, and how port services here will stay competitive.
The minister said Singapore's position as "a regional bunkering and oil storage hub is anchored by a strong eco-system of oil refineries and oil traders, and by the high volume of ships calling at Singapore for various services".
She noted that Klip, which will add oil storage and bunkering facilities, does not seem to offer container handling services, and that will mean minimal impact on Singapore's container transhipment port.
New berths at Pasir Panjang Terminal Phases 3 and 4 have fully automated yard crane systems that will be integrated with an automated guided vehicle system - now on trial - to move the containers around the port, she said.
The Government has also invested heavily in manpower, with recent additions including a SkillsFuture Earn and Learn programme for port operations officers.
Mrs Teo added: "We are developing a next-generation port at Tuas. With an annual capacity of up to 65 million TEUs (20ft equivalent units), 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 megaships of the future."
Separately, Trade and Industry (Industry) Minister S. Iswaran told Parliament that China's investments in South-east Asia "enhance the opportunities" for Singapore, whether to participate in regional projects as partners or for overall economic development.
His remarks were prompted by a question from Mr Zaqy Mohamad (Chua Chu Kang GRC) on a greater push of external investments in Singapore's neighbours and intensified competition.
Mr Iswaran said: "We must continue our effort in maintaining our emphasis on competitiveness and ensuring our industries remain viable, in the face of different types of competitions that will arise. There were others in the past and there will certainly be different forms in the future."
Mr Iswaran said: "We must continue our effort in maintaining our emphasis on competitiveness and ensuring our industries remain viable, in the face of different types of competitions that will arise. There were others in the past and there will certainly be different forms in the future."
** Indonesia aims for a slice of Singapore's sea cargo traffic
Govt to consolidate cargo from elsewhere at Jakarta port
By Francis Chan, Indonesia Bureau Chief In Jakarta, The Straits Times, 26 Jan 2017
The move to centralise transshipment activities is aimed at taking over a slice of the market currently dominated by Singapore, The Jakarta Post reported yesterday.
Transportation Ministry official Antonius Tonny Budiono said the government and units of state- owned port operator Pelabuhan Indonesia (Pelindo) are meeting to discuss plans to create an "integrated chain port".
This involves consolidating the export of cargo from ports such as Bitung, in North Sulawesi, and Sorong, in West Papua, at Tanjung Priok, which now handles about half of the country's export shipments.
Mr Antonius, who is director-general of sea transportation, said this will improve efficiency and make Tanjung Priok more attractive for shipping companies.
"The transshipment sector has long been dominated by Singapore (but) if the commodities originate in our country, why can't we handle them?" he told The Jakarta Post.
His comments followed recent reports that Malaysia's Port Klang Authority (PKA) plans to build a new seaport, next to Port Klang, the country's largest port.
The RM200 billion (S$64 billion) project, located on Pulau Carey, is critical if Malaysia wants to compete with Singapore for a larger share of the cargo trade, PKA chairman Kong Cho Ha had said.
Singapore, widely known as the world's busiest transshipment hub, accounts for almost a seventh of total global container transshipment.
Figures from the Maritime and Port Authority showed that Singapore's annual container throughput held steady last year at 30.9 million TEUs, or 20ft equivalent units. By comparison, container traffic at Tanjung Priok over the same period was 5.4 million TEUs, up from 5.2 million TEUs in 2015.
President Joko Widodo has made improving Indonesia's maritime infrastructure a key priority since he was elected in 2014.
Plans to jointly develop a deep- sea port in Patimban, West Java, were also brought up during a bilateral meeting between Mr Joko and Japanese Prime Minister Shinzo Abe in Bogor this month.
Indonesia, however, has also suffered setbacks in the sector, most recently when a plan to develop an international port in North Sumatra was stalled earlier this month.
Industry players and experts remain sceptical about the move, adding that the plan to consolidate cargo traffic at Tanjung Priok will be unlikely to have a negative impact on Singapore in the immediate future. This is because Singapore is still more strategically located than Tanjung Priok port.
Veteran industry analyst Christianto Wibisono called it a massive endeavour that will involve a sea change not only in port operations but also how business is conducted in Indonesia.
"Indonesia must ensure costs are lower and the service, faster... Unloading at Tanjung Priok port can now take up to five days, multiple times that in Singapore," he said. "So, sure it's doable but it is a very big challenge."
An Indonesian government official familiar with the industry said yesterday that Indonesia's "stance is to try to complement, not to compete" against its close neighbour.
Speaking on condition of anonymity, he added: "It is not realistic. Singapore is the world's No. 1 in terms of the ease of doing business, and No. 3 in terms of innovation."
*** East Coast Rail Link: Malaysia touts rail trade route as rival to Singapore
Railway linking east to west coast will allow projected 53 million tonnes of cargo to bypass Republic by 2030, it says
By Shannon Teoh, Malaysia Bureau Chief In Kuala Lumpur, The Straits Times, 10 Aug 2017
At a ground-breaking ceremony for the East Coast Rail Link (ECRL) attended by a high-level Chinese delegation yesterday, Prime Minister Najib Razak said the rail link "is a high-impact project that will seamlessly link the Klang Valley with the states of Pahang, Terengganu and Kelantan".
The RM55 billion (S$17.5 billion) rail link, which will be built and funded by Chinese state firms, is slated for completion in 2024.
"The viability of the ECRL is undisputed as it is estimated that 5.4 million passengers and 53 million tonnes of cargo will use the ECRL service annually by 2030 as the primary transport between the east and west coast," Datuk Seri Najib said at the event in Kuantan, capital of his home state Pahang.
It is in Kuantan that a new deepwater port, also jointly developed with China, will be joined to the west coast via the ECRL to Malaysia's main port in Klang. "Hence, regional trade routes mainly centred on the busy Strait of Malacca and the South China Sea via Singapore, may leverage on the ECRL transportation, which can cater for the movement of bulky items in large volumes at lower cost," he added.
Mr Najib said the 668km line would boost the eastern region - which lags behind the rest of the country - raising economic growth by 1.5 per cent a year.
China's State Councillor Wang Yong, head of the Chinese delegation, said the electrified rail project would promote regional connectivity and was a display of bilateral economic cooperation.
Analysts said China is "keeping all options open" in securing trade routes across the Indian Ocean to its shores.
Mr Jaafar Ismail of Fergana Ventures, a Malaysian advisory firm that specialises in infrastructure and resource-based projects, previously told The Straits Times that the Port Klang to Kuantan Port "land bridge" could provide a "significant resolution" to China's over-reliance on the Malacca Strait.
Still, analysts note that the 53 million tonnes Kuala Lumpur hopes will be carried via the ECRL each year is less than 10 per cent of what the Port of Singapore handles now.
"Singapore will still be very important for the short to medium term. It is arguably still one of the most efficient ports with massive carrying capacity," senior fellow Johan Saravanamuttu of the S. Rajaratnam School of International Studies told The Straits Times.
The ECRL, which will have 12 passenger, three freight and seven combined stations, will go north from Kuantan, Pahang, to the state of Kelantan near the Thai border.
The state-owned China Communications Construction Company will build the line, with China Exim Bank providing 85 per cent of the capital at an interest rate of 3.5 per cent.
The opposition in Malaysia has argued that the rail link is unlikely to generate sufficient revenue to repay the loan from China, while critics say Malaysian firms will not reap the benefits of the project.
However, Mr Najib said China had agreed to set aside 30 per cent of the project for local contractors.
The opposition Pakatan Harapan coalition said yesterday that the resources poured into the new rail link are at the expense of the 6,000 rail workers working for the national rail company, which will not be operating the new project.
A statement signed by coalition members noted the rail link will not be owned by the national rail company but by a new firm wholly owned by the Ministry of Finance.
About the line
The Straits Times, 10 Aug 2017
Funding: 85 per cent to be financed by soft loan from state-owned Exim Bank of China, at 3.25 per cent interest. Remaining 15 per cent to be funded through sukuk, or Islamic bonds, from Malaysian investment banks.
Route: 22 stations along the 688km line from Tumpat in Kelantan to Port Klang in Selangor, via Kuantan Port.
Travel time: Four hours. The journey by road takes between seven and 12 hours.
Built by: State-owned China Communications Construction Company. It is to be completed by 2024.
Impact: An estimated 5.4 million passengers and 53 million tonnes of cargo will use the service annually by 2030. It is expected to create 80,000 jobs and increase the gross domestic product of east coast states - Kelantan, Terengganu and Pahang - by 1.5 per cent.
SOURCES: BERNAMA, THE STAR/ASIA NEWS NETWORK
**** August 2018 ****
East Coast Rail Link and pipeline projects with China to be deferred: Malaysian PM Mahathir Mohamad
He says China understands KL's reasons for shelving East Coast Rail Line and gas pipelines
By Goh Sui Noi, China Bureau Chief In Beijing, The Straits Times, 22 Aug 2018
Two Chinese mega projects in Malaysia would be deferred, with Beijing's agreement, Prime Minister Mahathir Mohamad told a press briefing yesterday at the end of a five-day visit to China.
He was referring to the US$20 billion (S$27 billion) East Coast Rail Line (ECRL) and two gas pipelines worth US$2.3 billion.
"It will be deferred until such time we can afford, and maybe we can reduce the cost also if we do it differently," Tun Dr Mahathir said.
"It's all about borrowing too much money which we can't afford, can't repay, and also we don't need those projects for Malaysia at this moment," he added.
Dr Mahathir, who returned as prime minister for the second time after the Pakatan Harapan coalition scored a historic win in a general election in May, has denounced what he called the profligate spending of the previous administration on big-ticket items such as the Chinese projects as well as a high-speed rail project with Singapore.
Dr Mahathir also wants to negotiate a deferment of the rail project with the Singapore Government. Transport Minister Khaw Boon Wan met Malaysia's Economic Affairs Minister Mohamed Azmin Ali this month on the issue and they agreed to continue discussions.
The Chinese Foreign Ministry at its regular press briefing, while not addressing the issue directly, said it was inevitable that there should be problems or different points of view in the bilateral cooperation.
"These issues should be resolved properly through friendly consultations and from the standpoint of the long-term development of friendship and bilateral relations between the two countries," said ministry spokesman Lu Kang.
He noted that China was now Malaysia's largest trading partner.
Dr Mahathir yesterday witnessed the signing of a memorandum of understanding between Malaysia's Sime Darby and China's Cofco on cooperation to develop downstream applications of palm oil.
Last Saturday, Chinese carmaker Geely signed a deal to expand Malaysian carmaker Proton's markets overseas, beginning with China.
South-east Asia expert Xu Liping of the Chinese Academy of Social Sciences said the broad direction of economic cooperation would not be hurt as China had many other projects in Malaysia and the foundation was strong.
But Mr Xu said compensation would have to be paid if projects were cancelled or deferred as losses were incurred, including dismissing workers. Alluding to this, Dr Mahathir yesterday said "we have to find a way to exit this (ECRL) project at (the) lowest cost possible".
The political impact of Malaysia's move would be minimal at the moment, said Associate Professor Li Mingjiang of the S. Rajaratnam School of International Studies.
Noting that China is facing challenges from major powers in the region such as the United States, Australia, India and Japan, he said Beijing needed friends and for regional states to at least stay neutral in this growing strategic rivalry.
Still, Mr Xu said, for the Chinese, this episode is a lesson that for such large investments, there is a need to pay attention to political risks.
Still, Mr Xu said, for the Chinese, this episode is a lesson that for such large investments, there is a need to pay attention to political risks.
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