Budget 2020 to hasten logistics industry growth
MANCHESTER: Industry players say the 2020 Budget tabled last Friday clearly reflects the government's commitment to developing the domestic logistics sector by addressing overdue key issues such as rail lines and road repairs, while the huge sum allocated to improve port infrastructure calls for clarity in terms of the bigger plan to set Port Klang as a regional maritime centre and logistics hub.
Westports group managing director Datuk Ruben Emir Gnanalingam said Budget 2020's allocation would improve the country's transportation ecosystem and network, which augurs well for the overall logistics industry, including for Westports Holdings Bhd.
“These latest initiatives reflect the importance of the logistics sector as an integral part of the economy as the government seeks to make Malaysia the preferred destination for investments.
“With regards to Pulau Carey, the government's latest study would be able to hopefully discover when or how Pulau Carey may help in Port Klang's growth and hopefully it would be proven a viable option that could offer Port Klang even more capacity in the longer term,” he told Bernama when contacted via email.
To recap, the government has allocated RM50 million for the repair and maintenance of roads leading to Port Klang, while the Transport Ministry will commence feasibility studies on the Serendah-Port Klang Rail Bypass for cargo shipments and the Klang Logistics Corridor – a dedicated privatised highway connecting Northport and Westport – with both projects estimated to cost RM8.3 billion.
An additional RM50 million was allocated to stimulate public-private partnerships for the Kota Perdana Special Border Economic Zone at Bukit Kayu Hitam.
Thought Partners Group Consulting (TPG) founder and group managing partner Abi Sofian Abdul Hamid said the government is currently addressing the overdue need of rail bypass, a study for which was carried out years ago.
TPG is a management consultant on logistics and transport infrastructure and operations, port planning, development and operations.
Abi Sofian is also a member of the Chartered Institute of Logistics and Transport Malaysia (CILT) international management committee which oversees all CILT branches worldwide.
He said looking at the demand for rail services would clearly identify the need for rail services and operations, in particular for cargo movements to the ports as part of the total Budget 2020 package.
“If the rail bypass is completed, will rail operators such as Keretapi Tanah Melayu Bhd (KTMB) or the government buy more wagons and locomotives to serve the projected traffic? Will the improved infrastructure and connectivity enhance productivity and efficiency of the services which ultimately contribute to the whole supply chain? In short, will the infrastructure be utilised optimally?” he said.
He pointed that connectivity should be the main focus in developing rail systems in the country, especially to boost container growth in Port Klang, in line with the government's aspiration to establish Port Klang as a leading maritime centre.
“Simultaneously, there is also the need to look at the integrated connectivity between various container distribution centres with the ports and airports.
“Not only that, for the Bukit Kayu Hitam Cargo centre development, will it be an alternative for the containers to be transported direct via road along the PLUS Highway to Penang Port instead of passing through Padang Besar via rail, as currently there is no rail connecting Bukit Kayu Hitam to Penang Port,” he said.
On the development of Carey Island, Abi Sofian said the announcement of a feasibility study by the government was a good move, even though the study should have been carried out years ago after the island was identified as an option for a future port location in the Klang Port Master Plan undertaken by the Port Klang Authority in 2009-2010.
These latest initiatives reflect the importance of the logistics sector as an integral part of the economy as the government seeks to make Malaysia the preferred destination for investments.
Datuk Ruben Emir Gnanalingam
“As far as another container or multipurpose port in Carey Island is concerned, I believe this has to be studied carefully with a clearly defined need and requirement considering the dynamic nature of container trade worldwide,” he said.
He further explained that the plan to develop Carey island port and the highway between Northport and Westports must be viewed as part of the on-going development of Port Klang, for which the government has approved a capacity expansion plan.
“The government had already approved Westports' extension to create an additional capacity of 30 million Twenty-foot Equivalence (TEUs) for the next 30 years. At present, Port Klang's container handling capacity is about 12 million TEUs per annum.
Carey Island Port will have to be more than just another port, it must be able to attract ship calls and offer excellent connectivity for port customers,” he added. — Bernama