New ports to benefit Malaysia?


The construction of various new ports in the country would seem more beneficial to China, but the sea gateways are expected to also contribute positively to Malaysia’s growing economy and export.

The announcement made by Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi earlier in January that a new energy port will be constructed in Bagan Datoh, Perak, in addition to other similar projects, has somehow invited mixed views by various quarters.

Centre for Public Policy Studies chairman Tan Sri Dr Ramon Navaratnam said it would be more cost-efficient for the government to build these new ports earlier than later.

“I have no reason to believe that they are building these ports just for the sake of building. If they forecast an increase in demand then it is better to build earlier in anticipation costly,” Ramon told The Malaysian Reserve (TMR).

He said the partnership between Putrajaya and Beijing would mean that the risks are shared.

“Both governments must be clever enough to ensure that the investments made into these ports will have good earnings.

“If these ports do not deliver or are not used sufficiently, then Malaysia and China will suffer. It will be built and left,” he said.

The construction of the US$9.7 billion (RM30 billion) Bagan Datoh energy port involves the development of an oil pipeline that would cut

across Peninsular Malaysia and reach Bachok, a coastal town in Kelantan facing the South China Sea.

In addition to the oil channel, the port will also be built in line with the RM5 billion West Coast Express- way (WCE) — expected to be completed in 2019. Once finished, the WCE will connect all the ports along the Straits of Melaka.

Apart from the Bagan Datoh port, Beijing is also investing RM12.6 billion in the Kuala Linggi International Port (KLIP) in Melaka, as well as over RM200 billion in Carey Island.

Set to be a harbour which offers 1.5 million cu m of oil storage capacity and dry docks to manage oil tankers, KLIP will be built on 250ha of reclaimed land with construction spanning over 10 years.

Meanwhile, the 10,000ha Carey Island port is expected to handle 30 million twenty-foot equivalent units (TEUs) container ships annually in 20 years.

The proposed mega projects at Carey Island and KLIP are largely seen as attempts to lessen the over-dependency on Port of Singapore Authority, which has a handling capacity of 40 million TEUs yearly.

However, many also hold the view that the country already has plenty on its plate, especially with other ongoing mega projects in the pipeline.

Universiti Putra Malaysia’s Putra Business School fellow Wan Ahmad Fayhsal Wan Ahmad Kamal held the opinion that the proposed constructions of the upcoming ports were not necessary for the time being.

“I don’t think we need the ports at this point in time. My greatest worry is in the liability that we have to shoulder on after this.

“As it is, we already have many big projects underway and to add another RM30 billion (for the Bagan Datoh project) with scholarships and other costs being cut, I think it raises the question on what our priority is,” he told TMR.

Wan Ahmad Fayhsal further argued the need for a project that resembles the futile US$140 billion Yan Petroleum Industrial Zone (ZIPY), which also involved the construction of the Trans-Peninsular Pipeline.

“With the ZIPY project, they wanted to build a similar pipeline that would cut across Peninsular Malaysia and even then, that was not deemed as feasible,” he said, adding that the government would need to justify the construction of these new ports.

Meanwhile, Sunway University Business School economics Professor Dr Yeah Kim Leng said the construction of these ports are business risks that the government is undertaking.

“There is always a risk of a mismatch. We face the risk of building the ports too soon when the demand has not picked up.

“So, we have to be very careful in assessing the likelihood of whether economic activities will pick up. The key is in the projection of the usage of these ports,” Yeah said.