Singapore - A Global Maritime Hub

[babystan03]

Time is GMT + 8 hours
Posted: 02 November 2004 1800 hrs

PSA International makes bid for Asia Container Terminals stake: report

SINGAPORE : The Singapore port operator, PSA International, has made an offer to buy a 29 percent stake in Asia Container Terminals, a Hong Kong newspaper has reported.

According to the South China Morning Post, the bid is worth HK$600 million, or about S$133 million.

The stake is currently owned by Hongkong Land Holdings.

Asia Container Terminals is one of five operators of the Kwai Chung container terminals, which handle the majority of Hong Kong's container traffic.

The newspaper quoted sources as saying that PSA had made its proposal a few weeks ago, and that shareholders are now looking at it.

It says the deal will be completed within two weeks.

When contacted, a PSA spokesperson declined comment. - CNA

Copyright © 2004 MCN International Pte Ltd

[babystan03]

Nov 2, 2004
NOL and 13 shipping lines to raise cargo rates to US next year

Carrying a 40-foot container to the US West Coast will cost up to 7.6% more
Seoul - NEPTUNE Orient Lines (NOL), Mitsui OSK Lines and 12 other Asian shipping firms plan to boost freight rates to the United States for a third straight year as demand for Chinese goods increases and fuel costs rise.

The 14-line Transpacific Stabilisation Agreement will raise the cost of carrying a 40-foot container to the US West Coast from Asia by US$285 (S$476), or as much as 7.6 per cent, starting next May, the group said in an e-mail statement.

Rates to the US East Coast and Persian Gulf via the Panama and Suez canals will rise by US$430.

Profits at NOL and Hanjin Shipping have surged as demand for textiles, toys and other China-made goods caused Pacific freight rates to rise by about 15 per cent this year. Demand for cargo space to North America is expected to rise by as much as 12 per cent next year.

'The rise in shipping rates won't have a significant impact on Asian exporters,' said Lehman Brothers Japan senior economist Robert Subbaraman. 'Asian exporters might pass on to the US the rise in costs... I don't think that'll reduce demand for Asian products.'

Shipping companies expect cargo shipments to the US from Asia to expand by between 10 per cent and 12 per cent next year, helped by increasing demand for China-made goods. The shipping lines predicted the same growth rate to the US from Asia this year.

'Nominal increases in ship capacity as new and larger ships are delivered in 2005 to 2006 will be sharply diminished by operating limitations due to congestion,' the group said in the statement. 'That effective capacity is not expected to keep pace with steadily growing cargo demand.'

Asian exports to the US rose 17 per cent in the first eight months of this year to US$344.9 billion, according to the US International Trade Commission.

Chinese exports contributed to the growth, increasing 29 per cent to US$121.5 billion in the same period.

Increasing cargo from Asia, especially China, has strained US ports, rail networks, highways and the Panama Canal, the group said.

'Shippers are experiencing average delays of three to seven days in getting cargo delivered as vessels sit idle at anchor and as containers are delayed in transit or at harbour and inland terminals,' the group said. \-- BLOOMBERG NEWS

Copyright © 2004 Singapore Press Holdings. All rights reserved.

[huaiwei]

The HK port investment will be interesting.....competition with Whompoa right at its turf?

[babystan03]

Originally Posted by huaiwei

The HK port investment will be interesting.....competition with Whompoa right at its turf?

It will be more interesting if PSA gets it........

I wonder how big the chance is??

[huaiwei]

Originally Posted by babystan03

It will be more interesting if PSA gets it........

I wonder how big the chance is??

No idea siah....now it is making two concurrent bids, and the combined total will give it majority control in the port operator.

That will be interesting to watch!

[babystan03]

Originally Posted by huaiwei

No idea siah....now it is making two concurrent bids, and the combined total will give it majority control in the port operator.

That will be interesting to watch!

It's even more interesting to know that PSA actually has investment in Guangzhou.......doing something very strategic here??

[babystan03]

4 Nov 04

Big petrochem investments coming to S'pore: Vopak

Terminal operator says petrochem industry showing interest in region

By RONNIE LIM

(SINGAPORE) There is a strong likelihood of new multi-billion dollar petrochemical investments coming to Singapore, with the chemical industry showing renewed interest in the region after earlier focusing on China, a top official with independent terminal operator Vopak said yesterday.

'This is not speculation, as there are good signs that this might happen,' said Carel van den Driest, chairman of Vopak's executive board. 'We are talking to potential chemical customers at this moment, from Japan and the US and even Europe. They are actively looking at developing their downstream chemical production here, provided Singapore ethylene cracking capacity can be enhanced.'

As for investment in the large multi-billion dollar ethylene crackers, Mr van den Driest said: 'A number of big names in the industry are seriously considering this, and there are very strong signs that base chemical production here may be increased substantially.'

Oil majors are trying to extract the highest value-add out of each barrel through better integration of their refineries and petrochemical plants. And this could see ExxonMobil, which operates a US$2 billion ethylene cracker of 800,000 tonnes capacity here, dusting off the cobwebs from previously shelved plans - by a merged Mobil - for a second cracker here.

Shell Chemicals - which with a Sumitomo-led, Japanese consortium operates two ethylene crackers with a total 1.4 million tonnes capacity - will also likely decide by next year, with or without Sumitomo's participation, on another US$1 billion, 1 million tonne cracker here.

Mr van den Driest said the chemical industry is showing renewed interest in Singapore, as South-east Asian economies bounce back and regional demand for chemicals, including from India, increases.

Also, Singapore has become a more competitive investment base, with good support infrastructure ranging from finance and legal to transport and communications. 'That's why it is high on the list for potential new investments,' he said.

This revival of interest in the regional chemical scene is one of the factors behind his optimism that demand for independent oil/chemicals storage will remain buoyant in coming years. This bodes well for Vopak, which is building a fourth terminal, costing S$500 million, on Jurong Island. The new terminal will double its current 9.3 million barrels storage capacity here when completed in 2010.

The other factor is Singapore's booming status as an oil trading hub, which has resulted in strong demand from traders for independent storage.

'It is difficult to say if this is structural or related to current market volatility,' Mr van den Driest said. 'However, we see clear signs that global and regional imbalances in oil product supply and demand, both in quantity and quality, are set to grow for some time to come. So we are pretty optimistic for the future of oil storage.'

This is reflected in expansion plans of other independent terminal operators here, like Oiltanking, as well as in new storage projects planned on Jurong Island by oil traders like Hin Leong, Chemoil-Itochu and Vitol, according to market buzz.

According to Mr van den Driest: 'At the moment, many people are looking at expanding because of the strong market and high volatility. We are aware of quite a few people who are potentially interested in storage activities. This includes very large and successful traders, as, for them, having guaranteed access to storage at acceptable rates is important.'

China threatens S'pore's oil hub status: Vopak

By RONNIE LIM

SINGAPORE'S position as the region's oil hub is 'pretty solid', but the government must continually work on the nation's competitiveness to ensure it stays ahead of emerging rivals, especially China, says top Vopak executive Carel van den Driest.

He said that in terms of Vopak's expansion plans, for instance, 'while for the moment, Singapore is more important than China, that may change in future'. Because of the huge and growing mainland market for oil and chemicals storage, 'in coming years, China will be taking a bigger part of Vopak's investment efforts'.

Still, Mr van den Driest sees China playing a different role to Singapore.

'China is very important in both imports and exports of oil and chemicals,' he said. 'But it serves a different function from Singapore's hub function, where oil storage helps cater to supply and demand imbalances. If Singapore continues with the right policies, that hub function will belong to Singapore, and not to China or other South-east Asian rivals.'

Thailand and Malaysia, with its neighbouring Port of Tanjung Pelepas, are among those trying to develop regional oil hubs.

Mr van den Driest, Vopak's executive board chairman, is in Singapore to receive the Public Service Star tomorrow for his contributions to the local economy, including promoting Vopak's investment in one of the first oil storage terminals here in the early 1980s and building this up into its largest terminal in Asia.

He is also Singapore's Honorary Consul-General in the Netherlands and has advised agencies here, such as the Economic Development Board, on how the Republic can strengthen its logistics industry.

Vopak has so far set up five terminals in China - the largest in Shanghai - to cater to the giant China market, although the largest of these is only about a fifth of the size of its Singapore terminals.

As Mr van den Driest noted in Vopak's latest annual report that it will be difficult to establish a strong foothold in China until the market there is liberalised in 2007.

'We have just started operations at a large terminal in the Shanghai area, in partnership with the Shanghai government,' he said. 'While the working conditions there are not easy, we have a strong contract portfolio with Japanese chemical producers, so we are on a solid foundation. '

He noted that Vopak has drawn on Singapore 'know-how', including technical support, to develop its China business, although as 'the business there grows, we will have more know-how on the ground itself, and the reliance on Singapore becomes less'.

One critical shortcoming it has found in China, compared with Singapore, is difficulty in recruiting good engineers. 'They are a bit difficult to find and they are no longer cheap compared with Singapore,' he said.

[huaiwei]

Originally Posted by babystan03

It's even more interesting to know that PSA actually has investment in Guangzhou.......doing something very strategic here??

Seems like gaining an increasing stake in the Pearl region leh.

[huaiwei]

Singapore widens its lead in the overall busiest port category despite suffering a small drop in its container business in the year 2002. Here is a complete listing:

Originally Posted by huaiwei

As for which port is busiest, I have discovered it depends on which source you want to trust. I for one, prefers to trust this one (how's that for a more nuetral view? ):

Post Industry Statistics: American Association of Port Authorities

AAPA continuously receives requests on how ports rank nationally and internationally. The question is ambiguous, however, since ports can be compared in many different ways - by volume or value of trade, number of cruise passengers, revenues, and storage capacity, as examples.

Moreover, sheer size of a port, in terms of traffic flow, says nothing about productivity, efficiency, or responsiveness to customers. These are just some of the criteria that a shipper might consider in evaluating port performance.

Definitions Pertaining to Statistics

TEU = “Twenty-Foot Equivalent Unit,” a standard linear measurement used in quantifying container traffic flows. As examples, one twenty-foot long container equals one TEU while one forty-foot container equals two TEUs (i.e., 40'÷ 20' = 2).

TONS = A short (or “net’) ton = 2,000 pounds
A long ton = 2,240 pounds
A metric ton = 2,205 pounds

And sourced from their last published statistics: http://www.aapa-ports.org/pdf/rankworld.pdf

Largest seaports of the world

rank. port, country, cargo 2000
1. Singapore, Singapore, 325,591,100
2. Rotterdam, Netherlands, 322,429,000
3. South Louisiana, USA, 222,734,875
4. Shanghai, China, 186,287,000
5. Hong Kong, China, 174,642,000
6. Houston, USA, 173,770,000
7. Chiba, Japan, 169,043,000
8. Nagoya, Japan, 153,370,000
9. Ulsan, South Korea, 151,067,000
10. Kwangyang, South Korea, 139,476,000
11. Antwerp, Belgium, 130,530,626
12. New York/New Jersey, USA, 125,885,000
13. Inchon, South Korea, 120,398,000
14. Pusan, South Korea, 117,229,000
15. Yokohama, Japan, 116,994,000
16. Kaohsiung, Taiwan, 115,287,000
17. Guangzhou, China, 101,521,000
18. Qinhuangdao, China, 97,430,000
19. Ningbo, China, 96,601,000
20. Marseilles, France, 94,097,000
21. Osaka, Japan, 92,948,000
22. Richards Bay, South Africa, 91,519,000
23. Kitakyushu, Japan, 87,346,000
24. Qingdao, China, 86,360,000
25. Hamburg, Germany, 85,863,000
26. Dalian, China, 85,053,000
27. Kobe, Japan, 84,640,000
28. Tokyo, Japan, 84,257,000
29. New Orleans, USA, 82,400,000
30. Dampier, Australia, 81,446,000
31. Vancouver, Canada, 76,646,000
32. Corpus Christi, U.S.A., 75,461,000
33. Beaumont, U.S.A., 75,032,000
34. Newcastle, Australia, 73,871,000
35. Tubarão, Brazil, 73,182,000
36. Tianjin, China, 72,980,000
37. Port Hedland, Australia, 72,914,000
38. Hay Point, Australia, 69,379,000
39. Le Havre, France, 67,492,000
40. Port Kelang, Malaysia, 65,227,000

note: cargo = cargo volume in metric tons.

Largest containerports of the world

rank. port, country, containers 2000
1. Hong Kong, China, 18,098,000
2. Singapore, Singapore, 17,086,900
3. Busan [Pusan], South Korea, 7,540,387
4. Kaohsiung, Taiwan, 7,425,832
5. Rotterdam, Netherlands, 6,274,556
6. Shanghai, China, 5,613,000
7. Los Angeles, USA, 4,879,429
8. Long Beach, USA, 4,600,787
9. Hamburg, Germany, 4,248,247
10. Antwerp, Belgium, 4,082,334
11. Tanjung Priok, Indonesia, 3,368,629
12. Port Kelang, Malaysia, 3,206,428
13. Dubai, UAE, 3,058,886
14. New York/New Jersey, USA, 3,050,036
15. Tokyo, Japan, 2,898,724
16. Felixstowe, UK, 2,793,217
17. Bremen Ports, Germany, 2,712,420
18. Gioia Tauro, Italy, 2,652,701
19. San Juan, Puerto Rico, 2,333,788
20. Yokohama, Japan, 2,317,393
21. Manila, Philippines, 2,288,599
22. Kobe, Japan, 2,265,992
23. Yantian, China, 2,139,680
24. Qingdao, China, 2,120,000
25. Laem Chabang, Thailand, 2,105,262
26. Algeciras, Spain, 2,009,000
27. Keelung, Taiwan, 1,954,573
28. Nagoya, Japan, 1,904,663
29. Oakland, U.S.A., 1,776,922
30. Colombo, Sri Lanka, 1,732,855
31. Tianjin, China, 1,708,000
32. Charleston, U.S.A., 1,629,070
33. Genoa, Italy, 1,500,632
34. Seattle, U.S.A., 1,488,020
35. Le Havre, France, 1,486,108
36. Tacoma, U.S.A., 1,376,379
37. Barcelona, Spain, 1,363,695
38. Cristobal, Panama, 1,353,727
39. Hampton Roads, U.S.A., 1,347,364
40. Melbourne, Australia, 1,327,789

note: units are in TEU's (Twenty Feet-Equivalent-Units).

Some newer info for the above table. Shanghai has overtaken South Louisiana go be the 3rd busiest port, while Ningbo lept from 19th to 10th. Tianjin fluttered from 36th to 17th.

Largest seaports of the world - 2002

rank. port, country, cargo 2002
1. Singapore, Singapore, 335,156,100
2. Rotterdam, Netherlands, 321,851,000
3. Shanghai, China, 238,606,000
4. South Louisiana, USA, 196,445,000
5. Hong Kong, China, 192,510,000
6. Houston, USA, 161,190,000
7. Chiba, Japan, 158,929,000
8. Nagoya, Japan, 158,020,000
9. Kwangyang, South Korea, 153,447,000
10. Ningbo, China, 150,000,000
11. Ulsan, South Korea, 148,412,000
12. Inchon, South Korea, 146,181,000
13. Busan, South Korea, 143,772,000
14. Guangzhou, China, 140,395,000
15. Antwerp, Belgium, 131,629,626
16. Kaohsiung, Taiwan, 129,414,000
17. Tianjin, China, 129,000,000
18. New York/New Jersey, USA, 122,103,000
19. Qinhuangdao, China, 121,152,000
20. Qingdao, China, 120,000,000
21. Yokohama, Japan, 118,072,000
22. Dalian, China, 107,538,000
23. Hamburg, Germany, 98,272,000
24. Marseilles, France, 92,261,000
25. Dampier, Australia, 92,228,000
26. Osaka, Japan, 86,499,000
27. Kitakyushu, Japan, 84,249,000
28. Tokyo, Japan, 82,945,000
29. Port Kelang, Malaysia, 82,271,000
30. Port Hedland, Australia, 81,758,000
31. Richards Bay, South Africa, 81,509,000
32. Kobe, Japan, 78,601,000
33. Beaumont, U.S.A., 77,990,000
34. New Orleans, U.S.A., 77,163,000
35. Newcastle, Australia, 76,887,000
36. Shenzhen, China, 75,882,000
37. Tubarão, Brazil, 75,865,000
38. Hay Point, Australia, 74,672,000
39. Huntington, U.S.A., 73,590,000
40. Amsterdam, Netherlands, 70,417,000
41. Le Havre, France, 67,698,000
42. Corpus Christi, U.S.A., 65,362,000
43. Itaqui, Brazil, 64,942,000
44. Novorossiysk, Russia, 63,291, 000
45. Vancouver, Canada, 62,801,000
46. Long Beach, U.S.A., 61,615,000
47. Baton Rouge, U.S.A., 54,997,000
48. Gladstone, Australia, 54,466,000
49. Plaquemines, U.S.A., 53,661,000
50. Santos, Brazil, 53,474,000

note: cargo = cargo volume in metric tons.

Largest containerports of the world

Shenzhen made a splashing debut at number 6, while Tanjung Pelepas came in at 22 and Guangzhou at 28 for the first time!

rank. port, country, containers 2002
1. Hong Kong, China, 19,144,000
2. Singapore, Singapore, 16,941,000
3. Busan [Pusan], South Korea, 9,436,000
4. Shanghai, China, 8,620,000
5. Kaohsiung, Taiwan, 8,493,000
6. Shenzhen, China, 7,614,000
7. Rotterdam, Netherlands, 6,515,000
8. Los Angeles, USA, 6,106,000
9. Hamburg, Germany, 5,374,000
10. Antwerp, Belgium, 4,777,000
11. Port Kelang, Malaysia, 4,533,000
12. Long Beach, USA, 4,524,000
13. Dubai, UAE, 4,194,000
14. Yantian, China, 4,181,000
15. New York/New Jersey, USA, 3,749,000
16. Qingdao, China, 3,410,000
17. Bremen Ports, Germany, 3,032,000
18. Gioia Tauro, Italy, 2,954,000
19. Felixstowe, UK, 2,750,000
20. Tokyo, Japan, 2,712,000
21. Tanjung Priok, Indonesia, 2,680,000
22. Tanjung Pelepas, Malaysia, 2,660,000
23. Laem Chabang, Thailand, 2,657,000
24. Manila, Philippines, 2,462,000
25. Tianjin, China, 2,410,000
26. Yokohama, Japan, 2,365,000
27. Algeciras, Spain, 2,234,000
28. Guangzhou, China, 2,180,000
29. Kobe, Japan, 1,993,000
30. Jawarlal Nehru, India, 1,967,000
31. Nagoya, Japan, 1,927,000
32. Keelung, Taiwan, 1,919,000
33. Ningbo, China, 1,860,000
34. Valencia, Spain , 1,821,000
35. Colombo, Sri Lanka, 1,765,000
36. Xiamen, China, 1,750,000
37. Le Havre, France, 1,172,000
38. Oakland, U.S.A., 1,708,000
39. Melbourne, Australia, 1,600,000
40. Charleston, U.S.A., 1,593,000
41. Genoa, Italy, 1,531,000
42. Osaka, Japan, 1,515,000
43. Tacoma, U.S.A., 1,471,000
44. Barcelona, Spain, 1,461,000
45. Vancouver, Canada, 1,458,000
46. Seattle, U.S.A., 1,439,000
47. Tanjung Perak, Indonesia, 1,418,000
48. Piraeus, Greece, 1,405,000
50. Jeddah, Saudi Arabia, 1,367

[RafflesCity]

Gateway India

Zeroing in on the India-Singapore shipping route proved lucrative for Orient Express Lines, as JEAN CHUA finds out

BY focusing on the Indian subcontinent, Orient Express Lines (Singapore) has been able to grow from handling 148 20-foot equivalent units (TEUs) in August 1999 to delivering about 12,500 TEUs monthly this year. Among the feeder operator's customers are the world's biggest shipping companies - Maersk Sealand, Evergreen Marine and APL.

'We go where the cargo goes and we tailor-make our services to suit our customers' needs,' said managing director Mahesh Sivaswamy. 'That's how we remain competitive and differentiate ourselves.'

OEL (Singapore) was set up in July 1999 by Mr Sivaswamy as the Singapore offshoot of Orient Express Lines, based in Dubai. At that time, he was running the Indian operations of Orient Express and saw that Singapore was quickly becoming 'possibly the strongest hub port in the world'. 'Our strength is that we know the Indian subcontinent very well; we specialise in it,' said Mr Sivaswamy. 'And Singapore is one of the most important hub ports in the world. Cargo to and from the subcontinent needs to be connected to Singapore.'

The Singapore operations grew quickly and are now an indispensable part of OEL with 25 employees. The privately held, family-owned business is part of Transworld Group, founded by Mr Sivaswamy's father in 1977 as an agency that 'represented the shipping interests of various major shipping lines in India'. The agency expanded and created other units that represented Malaysian International Shipping Corp, Dongnama Line, United Arab Shipping Co, Ignazio Messina & C, CMA-CGM-The French Line, The Australian National Line and Balaji Shipping.

The group went on to add logistics, ship management and ship repair services to the business and feedering services in 1983 with the establishment of Orient Express Lines. The mission of Orient Express was to provide a common carrier feeder service in the region. Mr Sivaswamy and his older brother took over the feeder operator in 1989 after their father passed away, and set up an office in Dubai. Soon they had built a network of services between the Gulf, India and Pakistan. The Colombo-India services soon followed.


Surviving and thriving

After setting up the Singapore office, Mr Sivaswamy launched a service to Bangladesh and one to the west coast of India in 2000. Today, Orient Express operates more than a dozen services and has space-sharing arrangements with other feeders, covering the Gulf, the Indian subcontinent and South-east Asia. From Singapore, Orient Express serves the East coast of India, Bangladesh, Burma, Malaysia and Indonesia.

Mr Sivaswamy started a ship-owning business, Shreyas World Navigation, in 2001. It now owns three container ships which are registered in Singapore and fly the Singapore flag. It also charters ships that can carry about 1,200 TEUs - 'smaller boats', he calls them. 'The big shipping lines own ships that can carry 80,000 TEUs,' he said.

Mr Sivaswamy has said that establishing a firm presence in Singapore has not been easy; it is a very competitive market. 'It has been challenging but thankfully, we were recognised by the government under the AIS (Approved International Shipping) Enterprise scheme in 2001,' he said.

Last month, OEL (Singapore) was also awarded the PSB ISO 9000 certification, which puts the company on par with international ones. 'We have been working very hard on the quality issue, so this certification is a real honour,' he said.

The ability to survive and thrive depends on one's ability to meet customers' needs, Mr Sivaswamy said. He said that when Maersk - a customer of 15 years - made known its intention to move its operational hub to Tanjung Pelapas in Malaysia, Orient Express added a service to the port. 'There was actually a lot of pressure from the authorities not to shift to Pelapas, but that's what our customers need and we will go with them, even if it means losing some privileges here.'

'Success revolves around our people' is something Mr Sivaswamy swears by. He says he gives staff complete independence to make decisions and everyone works as a family.

While the company has achieved some success, Mr Sivaswamy says there is still a lot more to be achieved. 'Our primary goal is to do well in the subcontinent,' he said. 'There are still plenty of opportunities there.'

[redstone]

PSA sure is expanding fast!

[huaiwei]

Interestingly, raffie posted an article about Shanghai overtaking Rotterdam. I wonder where does Singapore stand in this case?

[babystan03]

Originally Posted by huaiwei

Interestingly, raffie posted an article about Shanghai overtaking Rotterdam. I wonder where does Singapore stand in this case?

I supposed that depends on which set of statistics they're using.......

I guess Singapore will most probably remain first or second(though not everybody agrees)???

[huaiwei]

Irconically, the Dutch reluctance in posting the source of their statistics is begining to cause me to wonder. I cant remember where I found the info explaining the differing standards of measure used, but I was actually thinking the Dutch method seems more "accurate"!

[babystan03]

According to PSA website http://www.internationalpsa.com/ .......the container handled in Singapore for Jan-Oct has reach 17.1 million TEU......

[babystan03]

Some regional news......

This story was printed from TODAYonline

Will Bush help build the Kra Canal?

If he chooses to make the fight on terror his legacy, S'pore may lose its maritime hub status

Wednesday • November 10, 2004

FOUR more years of United States President George W Bush may not be all good news for Singapore.

Yes, Singapore benefited under the first Bush administration. Perhaps in return for its strong support of the Iraq war, Singapore became the first nation in Asia to sign a free trade agreement with the US.

This could go a long way towards helping to boost Singapore's economy.

It would be logical to assume that Singapore's good relations with the second Bush administration will be equally beneficial. Such expectations would be right — in the short term.

Mr Bush is gearing up for his "war on terror'', a key platform that got him the mandate this time round. Singapore can be expected to play a prominent role in this fight. Such cooperation is likely to result in greater mutual benefits for the US and Singapore over the next four years. In the long run, however, things may not be so rosy, as US interests may not necessarily coincide with those of Singapore.

This divergence of interests may arise should Mr Bush — as part of his campaign to fight global terrorism and foster even better ties with China — decide to help build the Kra Canal in Thailand.

The Kra Canal would allow most of the ships to avoid plying the Malacca Strait, a potential route for a terrorist attack, and also provide a 1,000km shortcut.

But the canal would also mean that some maritime traffic would bypass Singapore, resulting in the erosion of its status as a maritime hub and loss of some income from servicing the 50,000 or so vessels that call here every year.

Mr Bush, in his second four-year term, faces the old "gun or butter" dilemma faced by Lyndon B Johnson (LBJ) during the Vietnam war era: Should money be used for the economy or to finance a war? LBJ tried tackling both and ended up succeeding with neither.

Which path will Mr Bush chose?

Judging by what he has done in the past three years, will Mr Bush continue to seek to cover all three issues: Keep the economy going, send more troops to Iraq and get tougher on whom he considers terrorists?

If, indeed, he wants to accomplish all three objectives, he would need to foster closer ties with China.

The American economy thrives on consumption. US consumers buy cheap goods imported from China and China in turns uses the money received to buy US-dollar assets, in effect financing the deficit spending of the US government and the consumers so that they can buy more from China.

For this virtuous (or perhaps, vicious) circle to continue unimpeded, China's burgeoning economy must have an uninterrupted supply of oil.

China, now the second-largest oil importing country in the world, imports most of its oil from the Middle East and those imports pass through the Malacca Strait before reaching their destination.

Interruption of the flow through the strait by accident, sabotage or terrorist attack, could derail the Chinese economy, which is said to run on a reserve of less than two weeks.

This, in turn, would affect the US economy and Mr Bush's war on terrorism.

The strait's littoral guardians Malaysia and Indonesia — with the exception of Singapore — are not keen on a US naval presence.

From the American perspective, a more permanent solution would, therefore, be to bypass the Malacca Strait altogether through the construction of the Kra Canal, a multi-billion-dollar project once considered too expensive.

Today, things have changed.

America has the money to help finance the project. Thailand also has an urgent agenda to eradicate Islamic insurgency in the south of the country.

The question now is whether Mr Bush will give his personal backing to such a massive project.

In his second, and last, term, he will be tempted, like so many American presidents before him, to leave a lasting legacy.

The Kra Canal could be that memento.

The writer is a freelance journalist.
If you have a view on this, email news@newstoday.com.sg

Copyright MediaCorp Press Ltd. All rights reserved.

[huaiwei]

Originally Posted by babystan03

According to PSA website http://www.internationalpsa.com/ .......the container handled in Singapore for Jan-Oct has reach 17.1 million TEU......

Hmm..is that a unprecendented record or something?

[redstone]

Waste money on a war for what?

[huaiwei]

Originally Posted by redstone

Waste money on a war for what?

Waste money on war??

Well..sometimes the desired results are not measurable in monetary terms thats why?

[huaiwei]

Originally Posted by babystan03

According to PSA website http://www.internationalpsa.com/ .......the container handled in Singapore for Jan-Oct has reach 17.1 million TEU......

If you refer to the thread on the busiest ports in the world, I used that figure to predict the full year cargo volume, and we are possibly hitting a super high record this year.