Malaysian Ports' Prospects To Remain Healthy - RAM Ratings

KUALA LUMPUR, July 19 (Bernama) -- RAM Rating Services Bhd (RAM Ratings) expects the container- and cargo-handling prospects of Malaysian ports to remain healthy this year, in line with the gradual global economic recovery. In a statement Tuesday, RAM Ratings said, the throughput growth was expected to remain in the low single-digit levels, akin to the modest three per cent recorded in 2016. Its Co-Head of Infrastructure and Utilities, Davinder Kaur Gill, said the prospects for the key national ports -- including Westports Holdings Bhd, Northport (M) Bhd and Pelabuhan Tanjung Pelepas Sdn Bhd -- remained stable, benefiting from the strengthening local and regional economic outlook. “Nonetheless, they are still vulnerable to the effects of the current trend towards protectionism and changes in shipping alliances,” she said. Davinder said Malaysia’s throughput was resilient in 2016, with container throughput recording a 10-year compound annual growth rate of six per cent, while cargo throughput came in at five per cent. At the same time, she said, Malaysia handled over 25 per cent of the containers passing through the ASEAN-5 nations ( Malaysia, Singapore, Thailand, Indonesia and the Philippines) and accounted for three per cent of the global container traffic. “While prospects for regional trade expansion are still encouraging, the long-term growth of South-East Asian ports must be analysed in the context of economic growth, the region’s upcoming new port capacity and the requirements of the newly formed shipping alliances,” said Davinder. From a funding perspective, she said, the Malaysian and regional port sectors’ financing needs would be massive if all the announced expansion plans come to fruition soon. “However, we expect a gradual roll-out,” she said. On this note, she said, domestic funding needs through the next five years were projected to be around US$1.16 billion (RM5 billion), factoring in the expansion of the Kuantan Port, Sapangar Bay Container Port and Port of Tanjung Pelepas. “This estimate may reach over US$58.32 billion (RM250 billion) if large-scale projects such as the third Port Klang at Carey Island and the Melaka Gateway projects take off,” she said. -- BERNAMA