Shifting container activities to Tuas-
Singapore, one of the world’s busiest container ports, plans to consolidate the activities at its current five terminals into a single terminal at Tuas in about 10 years. When the terminal at Tuas is ready, Singapore’s container handling capacity will be almost double the current 35 million twenty-foot equivalent units (TEUs).
The Tuas mega port development project will help meet long-term demand, eliminate the need for inter-terminal transfers, increase efficiency, and bring economies of scale. The use of the most advanced technologies in container handling operations will further push container cargo volumes at ports in Singapore. In addition, the location of the mega port at the south-western corner of Singapore offers benefits due to its proximity to major industrial areas and international shipping routes.
The land to be freed up by the existing container terminals in Singapore will be used for redevelopment activities.
Project description
The decision to consolidate and develop container handling facilities was finalised by the Ministry of Transport based upon the 2010 recommendations of the country’s Economic Strategies Committee, Ministry of Finance.
The Maritime and Ports Authority (MPA) awarded the contract for carrying out studies related to concept and preliminary and detailed design of an initial site formation for the mega port to a consortium led by Surbana International Consultants Private Limited. The scope of the contract also required the companies to facilitate preparation of construction tender documents and management of the tender process up to the award of the contract.
Singapore’s maritime sector is likely to gain significantly from the development of the mega port. The container capacity of Tuas port will be 65 million TEUs. The port is proposed to be developed over reclaimed land of more than 300 hectares with a quay length of 8.5 km. Upon completion, the port will be able to berth Malaccamax vessels with a draught size of 21 metres.
In July 2014, the Jurong Town Corporation awarded the $772 million contract for land reclamation works associated with the Tuas Finger One area to a consortium of Hyundai Engineering and Construction Limited, Samsung C&T Corporation, Penta-Ocean Construction Company Limited, Royal Boskalis Westminster N.V., and Van Oord. The total requirement of sand for reclamation of land is estimated at 24.5 million cubic metres, which is planned to be supplied through long distance bulk carriers. The combined share of Boskalis and Van Oord in the contract is estimated to be Euro 100 million for carrying out the dredging works. In addition, the consortium is contractually obliged to construct a quay wall of 3.4 km. The first set of berths at the mega port is scheduled for commissioning by 2022. The port project forms a part of the Ministry of Transport’s plans to merge and consolidate the container handling operations of the country in their entirety at one place.
Need for consolidation
Singapore currently has five operational container terminals, namely, Brani, Keppel, Tanjong Pagar, Pasir Panjang Terminal 1 and Pasir Panjang Terminal 2, with a combined capacity of 35 million TEUs. These are operated by Singapore-based PSA Corporation Limited. The development of the Tuas mega port will free up prime land, which the city terminals at Tanjong Pagar, Keppel, and Pulau Brani currently occupy, for future redevelopment. The leases for the terminals at Brani, Keppel, and Tanjong Pagar will end in 2027. In the long run, not only the city terminals, but also the Pasir Panjang terminals will be merged at Tuas.
At present, operators are sometimes required to move containers between different terminals using roadways to support transhipment operations. The consolidation will eliminate the need for inter-terminal movement of containers and ease congestion on the roads. This will mean faster movement of cargo and reduced operational costs.
Development of the mega port provides MPA with the option to plan to use advanced technology to cater to the anticipated challenges of increasing vessel sizes and complexity in vessel handling. MPA signed an MoU with PSA in April 2011 to jointly work on the Port Technology Research and Development Programme (PTRDP). The programme is aimed at paving the way for better and improved technology in container terminal operations in Singapore. The programme focuses on three broad areas – automated container port systems, advanced container port optimisation techniques and technologies, and green port technologies. It also aims to incorporate the use of automated guided vehicles (AGVs) to reduce manpower requirements and improve port productivity. The AGVs are expected to operate round the clock, which will make port operations more efficient.
A total of S$20 million is planned to be invested jointly by the contracting parties over the MoU period, which is five years. MPA and PSA signed an extension agreement in April 2014 for the PTRDP, which provides for further investments of up to S$30 million over the next five-year period.
Container cargo at Singapore’s terminals recorded a compound annual growth rate of 5.93 per cent, increasing from 25.87 million TEUs in 2009 to 32.58 million TEUs in 2013. The capacity utilisation levels at the port stood at a little over 93 per cent at the end of 2013. With the expected revival of growth in international trade volumes, there is likely to be further pressure on the already high capacity utilisation levels at the port. The country, therefore, is in immediate need of further capacity. The Tuas project is likely to help Singapore’s port sector sustain the projected increase in container volumes upon its completion.
Prospects for the project are brightened by expanding industrial activity in Tuas. Among the new developments are Sembcorp Marine’s plan to relocate its shipyards at Tuas by 2024, the recent commissioning of the Hyflux desalination plant, the proposed development of a lube park at the Tuas industrial complex, and the setting up of import, export, and storage facilities for other industrial plants in Tuas.
Outlook
Singapore is the second busiest container port in the world, behind China’s Shanghai port. It has accelerated its capacity addition efforts with respect to container cargo in its bid to be the world leader. Tuas port will help increase capacity, raise efficiency, reduce costs, and push up the growth rate in container handling volumes.
With the Tuas project still 10 years from completion, PSA is developing Pasir Panjang Terminal 3 and Pasir Panjang Terminal 4 to add a combined additional capacity of 15 million TEUs of container cargo by the end of 2020. The Tuas port project along with additional capacity at these terminals provide for promising prospects for the maritime sector of the country.
