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Northport urges Port Klang Authority to reconsider withdrawal of ITT subsidy
The decision 13 years ago by Port Klang Authority to subsidize the haulage
services for the Inter Terminal Transfer (ITT) of containers between
Westports and Northport was primarily aimed at fostering the load centering
at Port Klang and promote the national port as a regional transshipment hub.
The ITT charges were introduced for the horizontal movement of containers by
the hauliers between the two port terminals for containers that needed to be
transferred, by rail or by road, between the terminals to secure onward
transshipment connections provided either by mainline or feeder vessels.
This was especially the case when Westport, (located 30km from Northport)
was established in 1992.
In an attempt to foster the development of this transshipment trade, the
Ministry of Transport sought PKA to help subsidize the ITT charges for
hauliers, namely KTM Bhd which was asked to “shuttle” the containers between
the two terminals. The current subsidy is RM80per 20-ft container and /RM160
per 40-ft container) paid directly to the hauliers, in this case to KTM Bhd.
Without the subsidy, the full ITT charges would be borne by shipping
lines/agents which want containers to be moved to the port terminal at a
particular shipping service is offered by the shipping line.
“The development of the National Load Centre at Port Klang has been a
cornerstone of the Government’s national port policy and therefore the
proposed move to withdraw this subsidy for haulage services provided by KTM
Bhd and nominated hauliers could have serious implication on the development
of the national policy,” said the Deputy Chief Executive of Northport
(Malaysia) Bhd, Encik Haris Abdul Aziz
He noted that it was at the behest of the Ministry of Transport that the ITT
charges were subsidized by PKA in order to make it attractive for shipping
lines to call at either of the two port terminals at Port Klang which
supported the Government’s desire to make Port Klang the National Load
Centre and Regional Transhipment Hub.
“The withdrawal of the subsidy would therefore undermine and impair the
development of the national policy with severe consequences extending beyond
port operations of the terminal operators in Port Klang and potentially
impacting negatively on the economy,”.
Northport (Malaysia) Bhd is the port operating company of Northport, at Port
Klang which last year handled a total of 2.70 million TEUs, of which 37 per
cent consisted of transshipment traffic.
“We have invested much time and resources in fostering the development of
transshipment at Port Klang including by leveraging on the lower incidence
of ITT charges to make it more attractive for shipping lines to call at our
port,” he said.
“Undoubtedly the removal of the subsidy would have serious cost implications
to the development of transshipment traffic at Port Klang, particularly
since transshipment is now viewed as a driver of growth in traffic at Port
Klang,” he added.
He said coming as it does at a time when the competition in the regional
port system is intense and on the ascent, the increase in cost of
transshipment contributed by the higher incidence ITT would severely erode
the competitiveness of Port Klang as a regional transshipment hub.
“We have requested PKA to reconsider its proposed move to withdraw the
subsidy on the ITT charges which, we are all well aware, was devised as part
of a broader policy instrument to further a national agenda and therefore an
unilateral decision to withdraw the subsidy should be avoided and must take
into account sentiments of all stakeholders in the port,” he said.
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