PUTRAJAYA: Westports Holdings Bhd, through its wholly owned subsidiary, Westports Malaysia Sdn Bhd (Westports Malaysia), has obtained a 58-year extension to its port concession until 2082.
The new concession from 2024 to 2082 will include the existing port facilities in Westports and new facilities to be developed during the concession period involving an investment of RM39.6 billion.
The first Westports privatisation agreement was signed between the government, represented by Port Klang Authority, and Westports Malaysia for 30 years from Sept 1, 1994 to Aug 31, 2024.
Transport minister Loke Siew Fook said this marks the first time that an extension to a concession agreement is granted before its expiration.
“This is an important milestone as Port Klang is not only the largest national cargo centre but also one of the world’s biggest transshipment hubs,” he said at the signing ceremony for Westports’ third supplemental privatisation agreement today.
Port Klang ranked 12th globally among top seaports in 2022.
Westports said it will expand the port by building eight additional container terminals (CT10 to CT17) at a cost of RM12.6 billion.
“CT10 to CT13 is expected to cost RM6.28 billion, which will be spent from 2024 until 2038, while CT14 to CT17 is another development expenditure of RM6.28 billion,” Westports said in its bourse filing.
The additional terminals are projected to increase the port’s capacity from 14 million twenty-foot equivalent units (TEUs) to 27 million TEUs until 2082.
Terminals CT10 and CT11 are expected to be operational by the second quarter of 2027 and second quarter of 2029, respectively.
“The expansion is crucial to maintaining the competitiveness and excellence of Malaysian ports. We hope investors will take Malaysia seriously, as we (unity government) are a pro-business government,” Loke said.
Westports said the overall total projected capital expenditure of RM39.6 billion over 58 years includes the replacement capital expenditure of the existing CT1 to CT9, the initial development capital expenditure of the expansion, and the projected replacement capital expenditure for the expansion.
It said it will fund the development capital expenditure with a combination of internally generated funds, borrowings, dividend reinvestment and/or private placements.
It also said Westports Malaysia is in the process of establishing a new RM5 billion sukuk programme to finance the expansion.
Westports’ shares ended unchanged today at RM3.57, valuing the group at RM12.2 billion.