Soam said the expansion includes building a new deepwater terminal that will be able to attract trade with top economies like the United States, China, Japan, Europe and India.
It will be developed in two phases. Phase 1 will be completed in the next two years, by 2018. The second phase will be two years after Phase 1 is completed.
Kuantan Port Consortium (KPC), a 60-40 joint venture between IJM Corp and Guangxi Beibu International Port Group, is spending more than MYR3bn to double the multi-purpose port's capacity from the current 26m freight weight tonnes (fwt) to 52m fwt, while the Malaysian government is pumping in around MYR1bn to construct a 4.7km breakwater at the port, one of the longest in the world, and upgrading external infrastructure. IJM's share of this amounts to about MYR1bn, Soam revealed.
Soam pointed out that Kuantan Port’s advantage lies in its strategic location facing the South China Sea, in the middle of the busiest shipping lanes in the world.
“To the shipping community, this translates into significant cost savings and reduction in sailing time. We expect more business from China,” he said.
KPC has a 30-year concession since 1998 to manage, operate and develop Kuantan Port. It entered into a new agreement on 1 June 2015 for the new deepwater terminal for 30 years until 2045 and for another 30 years until 2075, subject to government approval.
Soam ventured that the new deepwater terminal should worry leading container port Singapore as some traffic may be diverted to Malaysia. He added that KPC is targeting shipments from China because of the short four- to five-day travel time.
"Singapore might become worried. We have Port Klang which caters to India, which is a big market. From Kuantan Port, we have China which is also another big market for trading," he said.
When the commodity business improves, there will be more shipments from Australia, where Kuantan Port will be the transit point before moving on to China, Soam said.
“That is why the Chinese authority sees it as strategic to invest in Kuantan and use this port. The government feels we need Chinese participation and that is why we are also developing the Malaysia-China Kuantan Industrial Park (MCKIP).”
Currently, sailing from Kuantan Port to Singapore takes a day, while to Hong Kong and China, about four to five days. It takes nine days to sail to Taiwan, 11 days to Tokyo, 21 days to the Middle East, 25 days to Europe, 28 days to the Mediterranean and 30 days to the west coast of the US.
Copyright © 2024. All rights reserved. Seatrade, a trading name of Informa Markets (UK) Limited. Add Seatrade Maritime News to your Google News feed.
