GEORGE TOWN: Penang Port Sdn Bhd has allocated RM186mil in capital expenditure (capex) over a span of two years.
Acting chief executive officer V. Sasedharan said the bulk would go towards strengthening and expanding the capacity of the berth, which includes the purchase of two ship-to-shore cranes.
Sasedharan said it would raise the container-handling capacity up to 2.9 million twenty-foot equivalent units (TEUs) from the current two million TEUs.
“The capacity has not been filled up yet, but there is around 6% container volume growth year to year.
“Penang Port container moved 1.52 million TEUs last year. If the growing trend continues, we believe that we will hit 2.2 million or 2.3 million TEUs within the next four to five years.
“This is to meet future demand, as it takes about 18 to 20 months to deliver this project.
“Feasibility studies have started and we expect the construction to start by the third quarter of this year,” he said during a media familiarisation visit to Penang Port on Feb 23.
This is after some RM30mil to RM40mil in capex last year was spent on the purchase of yard equipment.
He said Penang Port is among the five entities of MMC Port Holdings Sdn Bhd, which include Johor Port, Tanjung Bruas Port in Melaka, Port of Tanjung Pelepas in Gelang Patah and North Port in Klang.
Penang Port serves as the main gateway for shippers in the northern states of Malaysia and also the southern provinces of Thailand.
He said Penang Port recorded a 9% growth in revenue, driven by better cargo volumes primarily from South Thailand and also from hinterland cargo.
He said the cargo volume from South Thailand constitutes about 36% of Penang Port’s total container volume.
Container handling is the core operation with the North Butterworth Container Terminal (NBCT).
NBCT is one of the six separate terminals of Penang Port for breakbulk cargo, edible oils, barter trading, dry and liquid bulk cargo and the cruise terminal.
While the container business brings in about 68% of Penang Port’s revenue compared to the cruise terminal’s 5%, said Sasedharan, the Swettenham Pier cruise terminal recorded the highest growth at 20%.
Encouraged by the growth, he said it is going into a joint venture with Royal Caribbean Cruises Ltd for a cruise terminal development and management project expected to cost RM155mil.
“The project would expand the berth from 480m currently to 700m and allow two mega-cruise vessels to berth simultaneously,” he said.
In turn, he said the development would spur the growth of the local economy when more tourists arrive and spend.
“An international cruise passenger would usually spend around US$70-US$80 (RM280-RM320), while the global average spending is US$150 per person.
“The international transit passengers from cruise achieved 427,806 last year. The idea is that if we can do about half a million international transit passengers, that works out to about US$40mil for retailers and local trade that co-exist with Penang Port,” he added.
He said a total of 1.2 million passengers from the cruise segment last year also included 598,000 passengers from the Cruise to Nowhere, as well as 196,000 people from domestic and regional ferries.