KUALA LUMPUR: The ambitious RM140 billion third port in Klang – on Carey Island – has been shelved, The Straits Times (ST) reported.
The main reason is that cargo volume at Port Klang – both at Westports and Northport – have been falling, largely due to global shipping alliances shifting operations to Singapore.
MMC Corp and the government are hesitant to pour money into what may become a white elephant. Also, the report said, the government was satisfied, for the moment, with allowing the expansion of Westports.
The ST report said the Carey Island project, together with Malaysia’s main shipping hub Port Klang nearby, had been meant to challenge Singapore’s dominant position as Southeast Asia’s maritime hub.
It had been announced earlier that MMC Corp, led by Syed Mokhtar Albukhary, would partner India’s Adani Ports and government-controlled Sime Darby for the RM140 billion project.
According to the ST report, stiff competition in the Strait of Melaka – one of the busiest shipping routes in the world – and wider options for transporting goods to and from the Asia Pacific across the Indian Ocean has caused Malaysia’s biggest maritime development to lose momentum.
“With the government giving Klang rival Westports approval to double its capacity, the push for a third port in Klang is on the backburner,” a source was quoted as saying.
MMC, which owns Northport, did not respond to a request for comment by the ST.
However, its managing director Che Khalib Mohamad Noh had said in May that physical work on Carey Island’s 10,000-hectare development would likely commence in 2020, despite earlier reports that it would begin by the end of this year.
The ST quoted an industry source as saying: “MMC is still presenting proposals on a third port in Klang but the government seems happy with the Westports expansion for now.”
Port Klang has faced a challenging year, as new shipping alliances began shifting their scheduled dockings to Singapore instead since April.
If the slide in cargo volume continued, Klang would only handle about half its full capacity this year, the report said.
Singapore’s PSA, or Port of Singapore Authority terminal, however saw growth, with volumes up 8.5% as at October, compared with the same period last year.
Sources told the ST that MMC would go ahead with its long-delayed public listing of its ports business by early 2019. However, the exercise will not include its Carey Island development.