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  July 6th, 2016 | Written by

Malaysia’s Sapangar Bay Container Port to Become Strategic Transshipment Hub

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  • Malaysia has a goal of bringing about balanced economic development through enhanced port connectivity.
  • Connectivity between the Malasian hinterland and global market is hoped to accelerate economic development.
  • Sapangar Bay Container Port will serve as the main gateway to the region and the global economy at large.

The approval by Malaysia’s federal government for the expansion of Sapangar Bay Container Port marks a significant recognition for the country to develop its port infrastructure.

The government of Malaysia has a stated goal of bringing about balanced economic development in the state of Sabah through enhanced port connectivity.

Sapangar Bay Container Port has been identified under the National Blue Ocean Strategy to

stimulate and drive economic growth.

Cities, such as Greater Kota Kinabalu have always played an important role in a nation’s growth by providing investment and trade opportunities, as well as improving connectivity with rural or suburban areas and the global market.

Seamless connectivity between the hinterland and global market is hoped to accelerate the state’s industrial and economic development. Sapangar Bay Container Port will serve eventually as the main gateway not just for Sabah, but also the region to the ASEAN Economic Community, economies of

signatory countries to the Trans-Pacific Agreement, and the global economy at large, according to a government statement.

Under the Eleventh Malaysia plan, the Sapangar Bay Container Port will be developed into a transshipment hub. A master plan to upgrade and expand Sapangar’s infrastructure will be prepared this year. The transshipment hub strategy will boost the state’s connectivity to international markets generating higher volume of cargo to attract more shipping lines to call at Sapangar Bay. This, it is hoped, will be the long term catalyst to the industrial activities in the state.

The hub and spoke system will see Sapangar Bay Container Port as a load center supported by other ports such as Sandakan, Lahad Datu, and Tawau Ports.

The Federal Government had approved the expansion of Sapangar Bay Container Port as a project under the Sabah Development Corridor initiative. Sabah Ports Sdn Bhd, a 100 percent-owned subsidiary of Suria Capital Holdings Berhad, the operator, has been appointed as the implementing agency. The sum of 800 million Malaysian Ringgit, or $200 million, has been allocated under the plan, to be staggered over a two year period, this year and in 2017.

The long term plan, expected to be carried out up to 2030, will generate investment opportunities for the private sector in the provision of port services and activities as well as throughout the logistics supply chain. The port, with better facilities and deeper draft, will have the capacity of handling throughput of more than one-million TEU a year. With such capacity, it is expected to be able to boost efficiency to cater to panamax-size vessels.

The expansion plan will also see the establishment of a Free Zone Area. For the initial phase, the project will involve the expansion of its berth length from the current 500 meters to 1.2 km and the stacking area from 37 to 148 acres. With the additional operation area, the handling capacity is

expected to increase to as much as 1.25 million TEU from the current 500,000 TEU.

Currently, Sapangar Bay Container Port handles an average of 300,000 TEU per year, about 70 per cent of the total container throughput of Sabah. The growth has been on the uptrend at about 5 to 6 percent annually since privatization of the port.

Construction work for the first stage of the development will begin in early 2017 with expected completion by 2019. The Port Master Plan being prepared shall serve as a Blue Print to further develop the seaport and logistics industry in the state for the next 30 years. “This, according to the government statement, “will ensure sustainability of the port to continually support the economic development of the state.”