JOHOR BARU: The Port of Tanjung Pelepas (PTP) and Johor Port are awaiting the green light from the Government to consolidate and rationalise their operations.
Under the proposal, Johor Port’s container operations in Pasir Gudang will be moved to PTP in Gelang Patah, turning Johor Port into a non-containerised port, while PTP will focus on its forte of handling containerised cargo.
The streamlining of the operations is expected to bring immense positive impact and economic benefits not only to the two ports and Johor but also Malaysia’s port-operating industry and related services.
“The Government is still deliberating on the proposal but is expected to make a decision probably before the end of the year or early next year,” industry sources told StarBiz yesterday.
They said the Government was likely to approve the proposal, citing the move was of national interest and that the Transport Ministry and the Malaysian Industrial Development Authority (Mida) had been tasked to oversee its implementation.
An aerial view of PTP. The rationalisation and consolidation of PTP and Johor Port should help speed up the plan to turn Johor into a major regional logistics hub. They said senior officials from MMC Corp Bhd, Johor Port and PTP had on Oct 5 briefed the Transport Ministry on the proposal.
A closed-door briefing was held recently between senior officials from Mida, MMC, Johor Port and PTP with the companies in Pasir Gudang to discuss the proposal. However, no agreement was reached between the parties concerned.
Another meeting will be held next month as shippers had raised concerns earlier of the higher haulage costs likely to be incurred if they were to use PTP instead of Johor Port.
“However, they (shippers) must look at the positive side – the increase (in cost) will be offset by the time saved through direct sailings out of PTP,” the sources said, adding that unlike PTP, Johor Port could only cater to smaller vessels.
Billionaire Tan Sri Syed Mokhtar Al-Bukhary, who controls MMC Corp, has 100% equity in Johor Port and 70% interest in PTP and the Senai Airport.
To date, the MMC group has invested close to RM15bil in Johor – Johor Port (RM1.2bil), PTP (RM4.4bil), Senai Airport (RM300mil), Senai HiTech Park (RM1.1bil), Aliran Ihsan Resources (RM200mil) and Tanjung Bin power plant (RM7.6bil).
“PTP, Johor Port and Senai Airport have been identified as the axis for the development of logistics services within south Johor and they will be the main beneficiaries,” the sources said. The rationalisation and consolidation of operations of the two ports should also help speed up the plan by the Government to turn Johor into a major regional logistics hub.
They said an efficient logistics infrastructure in Johor, particularly in Iskandar Malaysia, was deemed vital to make Iskandar more attractive to potential investors.
The absence of a strong logistics infrastructure will in turn reduce Iskandar’s attractiveness to local and foreign investors; hence, the targeted investment of RM227bil for the economic growth corridor by 2020 will be at risk. It may hamper the Government’s vision of transforming Johor into a major regional logistics hub.
“The Government will also hope to fully utilise PTP and Johor Port and reduce or stop cargo leakages to Singapore,” said the sources.
Cargo leakages to Singapore have been ongoing for years due to better connectivity offered by the Singapore ports.
Johor Port was established in 1977 as a full-fledged government-run port with the objective of satisfying the shipping requirements of the southern region and reducing over-reliance on Singapore as a trading hub. The port was privatised in 1995.
As Johor’s only port, it grew throughout the 1980s and 1990s in tandem with industrial growth in the southern region and today it has reached full capacity.
PTP started operations in 2000 and is now one of the fastest growing container terminals in the world. It is seen by the Port of Singapore Authority as its strongest Malaysian competitor.
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