SINGAPORE'S PSA International has won the right to build and
operate a major container port at the Panama Canal, the world's
third busiest waterway after the Malacca Strait and the Suez
Canal.
The move represents a big growth opportunity for PSA - the world's
No.2 port operator - as about 5 per cent of all global shipping
passes along the 92-year-old canal.
And the canal is set to become even more important after a
US$5.25-billion (S$8.3-billion) plan to widen the waterway to
accommodate bigger ships was recently given the green light.
PSA has not disclosed the cost of the facility, which will be at
the canal's Pacific Ocean entrance, but it is estimated by industry
watchers to cost between US$100 million and US$200 million.
While this is not PSA's biggest overseas investment, it presents a
big opportunity to further tap into the fast-growing trade between
China and America's East Coast.
PSA operates a number of terminals in China, but the Panama port
will be its first in the Americas.
The Panama Canal is a massive short-cut letting ships sail between
the Atlantic and Pacific oceans without making the long,
treacherous trip around the bottom of South America.
About 40 per cent of all containers shipped from North Asia to the
US East Coast pass through the famous waterway.
The new terminal takes PSA's global network to 25 ports in 14
countries.
Like Hong Kong rival Hutchison Whampoa - the world's No.1 port
operator - PSA has been investing overseas for growth and now moves
more containers abroad than in Singapore, the world's busiest
container port.
PSA will face familiar competition at the Panama terminal as
Hutchison operates terminals at both ends of the waterway. PSA is
set to start operations by 2009.
PSA's concession from the Panamanian government comes two years
after Panama and Singapore signed a free trade deal.
'I am pleased that we have taken this important step to develop a
major port facility on the Pacific coast, in tandem with the
widening and expansion of the Panama Canal, which is currently
underway,' said PSA chief executive Eddie Teh.
'Our mutual collaboration will serve to add impetus to the flow of
world trade between Asia, the Americas, Europe and beyond.'
The facility will be located at a former US naval base at
Rodman.
The first phase of the three- berth project will involve PSA
building a 330m-long berth on a 12-ha plot that will handle both
container and roll-on-roll-off vessels.
Equipped with three quay cranes, the berth will be able to handle
450,000 standard containers a year.
A water depth of 14m also means that it will be able to handle
large ships that will sail through the canal when it is widened.
Many modern vessels are now too big to pass through the
waterway.
The Panamanian government said the PSA terminal will double the
country's port capacity, according to news reports on Monday.
It is unclear what impact PSA's Rodman project will have on
Panama's earlier plans to develop a giant US$600 million container
port at the Pacific end of the canal. Since last year, the country
has been keen for PSA to participate in the project.
Straits Times, 14 March
