Yang Amat Berhormat,

Penang needs a new port, Malaysia needs two new ports. My rationalisation is as follows:-

(a) I recall the 30-year concession to operate the Penang port ends in 2023 and the 10th Malaysia Plan allocated RM351 million required to dredge the port from 11.5m to 14.5m to enable large transshipments to be brought in. Dredging remains an interim solution. 

(b) The 890km long and 25m deep Straits of Malacca is the main shipping channel between the Indian Ocean, the South China Sea and the Pacific Ocean linking major Asian economies of India, China, Korea and Japan. Some 94,000 vessels pass through the straits carrying 25% of the world’s traded goods including oil, Chinese manufactured products, Malaysian palm oil and Indonesian coffee. 

(c) The maximum size of vessels that can make passage of the straits are that of Malaccamax. Larger ships including those of Chinamax with a draft of 24m typically use the Lombok Straits, Makassar Straits, Sibutu Passage and Mindoro Straits…a detour of several thousand nautical miles.

(d) At Phillips Straits, close to the south of Singapore, the Straits of Malacca narrows to 2.8km and coupled with smoke from Indonesian bush fires forcing vessels to slow down. A consequence is the vulnerability to piracy attacks. Small wonder that since 2003, 1/3 of the global total of piracy attacks occurred in the straits. 

(e) The recent announcement of an Indian-Indonesian cooperation to further develop the existing port of Sabang at the tip of northern Sumatra which presently has a depth of 40m, to accommodate bigger ships including naval vessels will pose great competition to Malaysian ports along the Straits of Malacca. 

(f) Development of the HSR appears to stretch the financial and human resources that is needed for Malaysia to compete with the ports in Indonesia and Singapore. 

I am pretty sure that the Ministry of Transport can avail you more statistical data for further analysis.

Where should Malaysia locate the new Penang port?

The area off Pulau Betong-Bukit Gemuruh-Gertak Sanggul is the obvious choice for the reasons listed below:

– Situated at the neck of the Straits of Malacca and proximal to the deepest draught.

– Synergistic to the land reclamation and development off Teluk Kumbar. 

– Conducive to reducing risk of vessels passing below the 2 Penang bridges. 

– Contributing to creation of new job opportunities in Penang’s South West District, especially for displaced fishermen. 

– Reducing gridlock in Penang’s North East District. 

What are the other benefits for Malaysia beyond Penang? 

In a posting dated 22 August 2013 on the website of the Asean Ports Association of Malaysia (apamalaysia.com) former PM Najib Razak announced that by 2020, the maritime sector will provide 55,000 jobs and bring in RM19 billion. I think these targets can be exceeded if all ports in East and West Malaysia are upgraded to take advantage of port congestion in Australia (due to low sulphur coal exports to China) and China (due to import of raw materials and export of finished goods).

In an appendix in the 2013 Maritime Industry Report published by MIGHT, the then BN Government projected that shipbuilding and repair will rake in RM7 billion. 

Developing new ports and upgrading existing ones via bonds as well as holding the ports and supporting infrastructure under the ownership of a Malaysian Infrastructure REIT (MI-REIT) will attract FDIs all over the world, provide alternative investments for Malaysian and increase capitalisation of the local stock market. 

So, where to site Malaysia’s second new port? 

I propose that it be at Middle Rocks done ala China’s reclamation of islands in the South China Sea. 

Obviously, our beloved nation has more to gain from Malaysian Infrastructure bonds (MI-bonds) and MI-REIT than ECRL and HSR which benefits China and Singapore more. 

The two new Malaysian ports will be the gamechanger for China and Singapore to renegotiate on the ECRL and HSR projects. 

Furthermore, if Malaysia fails to recognise the rivalry between India and China to control maritime routes, the latter may intensify efforts to push Thailand to cut a canal across the Kra Isthmus, effectively killing ports in peninsular Malaysia. 

And the lesson from the Malay proverb “Sediakan payung sebelum hujan” teaches us that NOW is the time to plan for the future of our country and prioritise the interests its citizens.

Thank you. 

Yours faithfully, 
Chow Siew Cheong  

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.