Government wants Tanjung Pelepas to double capacity

Port of Tanjung Pelepas. Credit: Getty Images

The Malaysian government wants to gradually expand Port of Tanjung Pelepas’ (PTP) capacity by 2030. It is anticipated that the port can handle more than twice its current throughput.

Presently, PTP can process up to 12.5 million TEU of containers a year, Transport Minister Anthony Loke Siew Fook said. If expanded, the port can handle 30 million TEU annually by 2030.

Located in Iskandar Puteri in Johor, PTP opened in March 2000 and was positioned as a competitor to neighbouring Port of Singapore, which was then the world’s busiest container port. Since then, Shanghai has overtaken Singapore in processing the most containers in the world, although Singapore remains the busiest container transshipment hub.

APM Terminals has a minority stake in PTP’s holding company, Seaport Terminal, part of the MMC Group that also owns terminals across Malaysia.

Loke said at a recent press briefing, “The federal government, especially the Ministry of Transport, has given its full support to the proposed expansion of PTP, which is a major port in the country, playing a strategic role in the development of the country’s maritime sector.

“Of course, this proposed expansion is very important and strategic and needs to be implemented immediately,” he told reporters after officiating the Johor Port Authority’s Ports Week 2019.

Loke said that he would meet with the Johor Mentri Besar, Datuk Dr Sahruddin Jamal, to gain the state’s approval on the matter and to ensure PTP’s expansion plan is carried out efficiently.

DPC came across a tender notice that PTP placed in some newspapers and trade publications in April 2019, seeking offers from experienced dredging contractors. The notice stated that PTP wanted to deepen its waters from the current 16.4 m to 18.5 m in order to cater to the latest generation of Triple-E ships.

Loke told journalists that the cost of the expansion would be borne by the private sector and the concession holder of PTP.

The minister said, “If we do nothing within the next three or four years, PTP will reach full capacity. We cannot do any expansion planning when it is full, we have to do it now.”

Should the expansion go ahead, it will be PTP’s second expansion since it commenced operations. In 2014, two additional berths began functioning in PTP, raising the terminal’s capacity to its present level.

Neil Davidson, Drewry senior analyst, ports and terminals, told DPC that the expansion of Tanjung Pelepas is a natural progression in order to accommodate future traffic growth.

He said, “The port is already fairly highly utilised, and so in the medium term, more capacity will be needed if it’s to grow its volumes. Whether its 30 million TEU capacity by 2030 is the key consideration, it’s all about timing and phasing, which in turn is influenced by 1) overall trade growth, but also by 2) the future market shares of the competing Southeast Asian transshipment hubs.”

Davidson said that trade growth will be driven by global and regional economic growth, but also to the extent that things such as the US-China trade war lead to a relocation of manufacturing from China to Southeast Asia.

He said, “The future market shares of the Southeast Asian transshipment hubs will essentially be more of the same, with Tanjung Pelepas battling it out with Singapore and Port Klang as it already does – and this in turn is a reflection of the performance of each liner shipping alliance.”