Short Position

Ship-to-ship clean-up

THE move by the federal government to introduce a new ship-to-ship (STS) transfer hub in the waters of Johor has many positives, although execution will be key. To recap, the plan is to build what is being touted as the world’s largest STS hub off Johor’s Port of Tanjung Pelepas. The project also entails the entry of Hutchison Ports as a 30% shareholder of the proposed STS hub. This indicates a certain level of professionalism that should come into that area of business, where a lot of opaqueness exists currently. For example, it is difficult to know for sure how many actual operators of STS are presently running in the Johor Straits. It is also unclear who all the owners are (although some are clear) and what kind of revenues and profits they earn. What is impressive about the new STS hub is its grand plan. In a nutshell, it will have mooring structures to berth vessels without the need for piers or docks and at a lower cost for shippers. It will be able to accommodate up to 30 vessels at one time.