INDONESIA

PORT OF BOOM BARU PALEMBANG TIES UP WITH LOCAL GOVERNMENT TO IMPROVE REVENUE

The Indonesia Port Corporation II (IPC II) signed a Memorandum of Understanding (MOU) with the Palembang Municipal Government on 24 October 2003 to promote the implementation of regional autonomy and, at the same time, foster the improvement of port service provisions. The cooperative venture involves areas concerning licensing, setting-up of billboards within the port’s jurisdiction, issuance of construction permit, provision of water supply, designation and utilization of parking areas for vehicles, and settlement of land dispute within the port area.

For a WIN-WIN situation to be concluded, each contracting party is given the elbowroom to weigh first the potentials and opportunities attached to the agreement before the entire process further progresses into the mapping out of details of implementation covering financial, legal and technical aspects.

If all goes well, the Municipal Government of Palembang expects that this positive move would set a precedent for other state-owned enterprises to replicate.

PORT OF PALEMBANG AND PERTAMINA COOPERATE IN PORT AND MARITIME SECTOR

The Indonesia Port Corporation II (IPC II) signed a Memorandum of Understanding (MOU) with PETAMINA, a state-owned enterprise engaged in oil and gas exploration/distribution, to embark on a mutually beneficial cooperation in port and maritime sector. PERTAMINA is represented by Exploration Unit III Plaju. This initiative, an undertaking of SOE Incorporated, is a pilot project for IPC II and PERTAMINA.

Both contracting parties are given the leeway to explore the benefits and advantages that the agreement offers prior to the drafting of specific policies and mechanics that will encompass the financial, legal and technical elements.

LOCAL GOVERNMENT APPROVES THE DEVELOPMENT

OF MAKASSAR PORT

The Governor of South Sulawesi, H.M. Amin Syam approved the idea of developing Makassar Port to northern direction as disclosed during the meeting between the local government of South Sulawesi and the Managing Director of IPC IV at the Governor’s Office several weeks ago.

The development of Makassar Port will be done in three stages, with the plan of dedicating operational areas specific only for passenger, cargo and container services to facilitate orderliness in port activity, calculated to be dominated by container traffic in the immediate future.

In Stage I, an additional wharf of 100 meters long will be built through the reclamation of the northern side, around the area of PT IKI (Ship Industry). This area, targeted for completion by 2015, would be staked out for passenger handling operations as well as for commercial and business activities. In Stage II, the development, to be carried out between 2015 and 2025, will be focused on the construction of a container wharf with about 1,100 meters in length. Lastly, Stage III will expand the container wharf by building bulk terminals, expected for completion by 2050.

MALAYSIA

PORT KLANG AUTHORITY SIGNS CONSULTANCY AGREEMENT AND MANAGEMENT CONTRACT TO DEVELOP PULAU INDAH FREE ZONE

An official signing ceremony for the Consultancy Agreement and Management Contract between Port Klang Authority and Jebel Ali Free Zone International (U.A.E.) was held at the Sheraton Subang Hotel, Petaling Jaya on 24 October 2003.

Signing on behalf of Port Klang Authority were Y.B. Tan Sri Dato’ Seri Dr. Ting Chew Peh and Y. Bhg. Datin Paduka O.C. Phang, the Chairman and General Manager of Port Klang Authority, respectively. Jebel Ali Free Zone International (JAFZI) was represented by Mr. Sultan Ahmed bin Sulayem, Executive Chairman of JAFZI - U.A.E. Mr. Ahmed Butti Ahmed, JAFZI Group Managing Director accompanied Mr. Sultan to the signing ceremony, which was officially witnessed by Y.B. Dato’ Chan Kong Choy, Malaysia’s Minister of Transport.

Under the Consultancy Agreement and Management Contract, JAFZI will assist Port Klang Authority (PKA) in conceptualizing the transformation of a piece of land, measuring 1000 acres, at the Pulau Indah Free Zone, Port Klang into a Distribution Megahub. The services that JAFZI will provide cover a wide range of free zone management aspects such as management and administrative services, marketing and sales – both technical and operational.

The development of the Distribution Megahub will be modelled after Jebel Ali Free Zone (JAFZ), the major distribution hub in the Middle East and the most successful Free Zone in the world. Created in 1985 to attract international investments, JAFZ offers the perfect manufacturing, trade and distribution location combined with government incentives not available anywhere else in the world. To date, JAFZ has attracted more than 2200 companies, including multinationals such as Nokia, Unilever, Fuji, Shell, Matshushita, Nissan and Ciba-Geigy from over 100 countries.

Port Klang Authority’s development of the Free Zone in Pulau Indah is in line with the government’s objective of making Port Klang a regional distribution base as well as a major trade and logistics center. The development will include, among others, the construction of high tech buildings and offices, transshipment facilities, light and medium industries, warehousing facilities and manufacturing facilities.

The development for the Distribution Megahub will be carried out by Kuala Dimensi Sdn. Bhd. on a ten year - deferred payment basis. The entire development is expected for completion in five years time.

Being strategically located, Port Klang currently has trade connections with over 120 countries and dealings with more than 300 ports worldwide. Its ideal geographical location makes it the first port of call for ships on the eastbound leg and the last port of call on the westbound leg of the Far East-Europe trade route. Its nearness to KLIA and well-connected major highways to all parts of the country makes it a choice location. Coupled with JAFZI’s expertise, system and brand recognition and the easing of custom formalities and other rules and regulations within the Pulau Indah Free Zone, the Transshipment Megahub in Pulau Indah is expected to attract more than 100 companies worldwide and this certainly will augur well for the development of Malaysia.

PORT OF TANJUNG PELEPAS PHASE II PROGRESS REPORT

The Port of Tanjung Pelepas (PTP) is experiencing excellent growth primarily through the entry of new businesses. The hubbing at PTP of two of the world’s largest liners, Maersk-Sealand and Evergreen Marine Corp., will see significant spin-offs through growth in feeder traffic and utilization rate of the port’s distribution park.

To ensure continued growth and to stimulate demand, PTP has embarked on Phase II of its port expansion plan. The scope of works for Phase II includes dredging (widening and deepening of the approach channel), dredging and reclamation of Bunker Island, and construction of linear berths measuring a total of 208 kilometers.

The dredging project will widen the channel approach from 250 meters to 400 meters, thereby enabling two-way access for vessel traffic entering or leaving the port’s harbor. Also, the draught will be deepened from 14 to 17 meters, allowing the port to accommodate the latest ‘S’ and ‘K’ class vessels which have an average capacity of 6,000 to 8,000 TEUs without any tidewater restrictions.

Bunker Island will also be reclaimed to upgrade the port’s bunkering facilities, making it at par with the best in the region and allowing it to offer quality competitive bunkering services to shipcalls.

Berth construction will be completed in phases and by year 2004 the first two berths, Berth Nos. 7 and 8 with a total of 720 meters, will be equipped with comprehensive back-up facilities, i.e., quayside cranes, transfer cranes and container yard.

By 2004, the handling capacity at PTP will rise to five million TEUs, an added capability that will attract new main shipping lines to hub at the port.

HANDLING CAPACITY AT PORT OF TANJUNG PELEPAS RISES TO FIVE MILLION TEUs

PTP took delivery, in December 2002, of the final two Super Post Panamax quayside cranes for Phase I of the port’s development programme. The port now has 24 quay-side cranes and, with the recent arrival from Noell Crane Systems GmbH (Italy) of the final batch of five rubber-tyred gantry yard cranes that brings the total to 72 units at the port, has enhanced its annual handling capacity to five million TEUs.

The new quayside cranes are the largest in South East Asia. These latest additions in cargo handling equipment enable PTP to handle the next generation of container vessels. Ten of the 24 quayside cranes at PTP are Super Post Panamax, having an outreach of 60 meters that allows the handling of 22 boxes across a container vessel. Also, apart from being equipped with twin-lift spreaders capable of handling two 20’ containers at one time, the cranes are equipped with an articulated gantry system enabling them to negotiate curves for better maneuvering between the port’s Phase I and Phase II operational areas.

“The delivery of these cranes are timely”, said PTP Chief Executive Officer Mohd. Sidik Shaik Osman, “as TEUs handled at the port are increasing steadily.”

SHENKER AS TO SET UP AT PORT OF TANJUNG PELEPAS

Shenker AS, one of the world’s leading providers of integrated logistics services offering land transport, air and sea freight as well as comprehensive logistics solutions and global supply chain management from a single source, is setting up a distribution center at PTP to further strengthen and expand its business operation.

Covering 4,560 sq. meters and located in the port’s free trade zone, the warehouse facility will offer its clients a wide variety of value-added services. Shenker AS currently operates seven distribution centers nationwide, offering a total of 23,250 sq. meters of warehouse space. The company is confident that having their facility situated at PTP will provide them with the competitive edge since the port provides very good connectivity to shippers and ship operators.

PORT OF TANJUNG PELEPAS PULLS OFF A COUP

Port of Tanjung Pelepas (PTP) has successfully persuaded the world’s third largest liner operator, Evergreen Marine Corporation, to shift its transshipment hub to PTP from the Port of Singapore Authority (PSA). Commencing in October 2002, 80% of the giant Taiwanese liner’s 1.2 million TEU’s is now being handled by PTP. Coming on the heels of the Danish shipping giant, Maersk-Sealand’s migration to PTP, two years previous to Evergreen’s, has drawn major shipping operators’ attention to the performance of and prospect for PTP.

Primary reasons attributed for the move were the lower cost structure, including labor and storage, and the high productivity and efficiency levels at PTP, which currently stand at 30 crane moves per hour, compared to 27 for PSA.

With these developments, PTP was confident of handling 2.6 million TEUs in 2002, and is optimistic of hauling 3.5 million TEUs in 2003 when the port will experience the full-year impact of an increase in transshipment volume by Evergreen.

PTP currently offers six berths of 360 meters each in length, backed by one of the largest container yards in the region with a storage capacity of 110,000 TEUs. PTP’s current capacity is five million TEUs, which will rise to six million TEUs in 2004 when additional berths, constructed under Phase II of the port’s expansion programme, are commissioned for usage.

“We also hope to further increase terminal efficiency, which is already at a very high level of 30-31 gross moves per hour per crane, higher than most established terminals. This consistent crane and vessel productivity will be further increased with the introduction of two new twin-lift cranes, the first in South East Asia. It is this overall ability that has determined our ability to compete”, said PTP Chief Executive Officer Mohd. Sidik Shaik Osman.

THAILAND

BANGKOK PORT NEW AREA FOR SEZ

Bangkok Port (BKP) allocates an area for its Special Export Zone (SEZ) at the Container Stuffing Yard. At this particular location, the handling of containers for export is warranted to proceed at a faster pace and greater convenience than at the area behind Transit Shed No. 6. Moreover, the designated area, which has a holding capacity of 300 TEUs, is assured to be safe from floods.

The prescribed fees for utilizing SEZ are 500 Baht/20’/month and 1,000 Baht/40’ and 45’/month on the condition that for each trip the total number of export containers shall not be less than 10 TEUs.

PAT APPLIES ISPS CODE AT BANGKOK PORT

Bangkok Port (BKP) is ready to put into practice the International Ship and Port Facility Security Code (ISPS Code) which will come into force starting July 1, 2004.

The Port Authority of Thailand (PAT) has set up a committee to oversee the implementation of the International Maritime Organization’s (IMO) plan of adopting the Safety of Life at Sea Convention (SOLAS) amendments as embodied in the ISPS Code. The work activities of the program include the drafting of regulations concerning the designation of personnel to respectively act as Ship Security Officer, Port Facility Security Officer and Ship Security Assessment/Port Facility Security Assessment Officer. These also involve the mapping out of an action plan and implementation process, for the reference and guidance of all parties concerned, which would be pilot-tested prior to the Code’s enforcement period.

CONTAINER X-RAY EQUIPMENT SET UP FOR BKP

As part of the reform plan for its operating systems, the Customs Department will install a mobile X-ray system to be utilized in the inspection of containers at Bangkok Port (BKP).

The installation is also designed to conform with the U.S. Customs Container Security Initiative (CSI) for the exportation of containers to the United States of America (USA). It is expected to be fully operational in early 2004, providing a significant boost that will enhance BKP’s image as a reliable player in international trade.

PAT TO ESTABLISH 7 SUBSIDIARIES

The Port Authority of Thailand (PAT) has plans to establish seven subsidiaries aimed at rationalizing business-related operations, increasing revenues as well as helping relieve its pension burden.

The identified subsidiaries consist of Chiangsaen and Chiangkhong Port Company, Ranong Port Company, Songkhla Port Company, Dredging Company, Pilotage and Towage Company, Assets and Properties Management Company, and Logistics Service Providing Company. Each subsidiary will be held responsible for a specialized business function that will further increase revenue and enhance overall business capacity of the PAT.

The plan is in response to the initiative of Prime Minister Thaksin Shinawatra, who had recently visited PAT, for the agency to adopt a new management style that will push for competitiveness and efficiency. PAT is contracting the services of a Consultant for the conduct of the requisite feasibility study, which will then be submitted to the Cabinet for approval.