Dr M dismisses claims Johor govt unaware of shipping hub project

PUTRAJAYA (April 3): With the development of the world’s largest ship-to-ship (STS) hub in Johor Bahru port waters set to commence within 12 months, Prime Minister Tun Dr Mahathir Mohamad yesterday brushed aside claims that the Johor state government was not informed about it.

“The Johor MB (Menteri Besar Datuk Osman Sapian) knows about this project. He asked me about it yesterday,” Dr Mahathir told reporters after a signing ceremony of a heads of agreement (HoA) between KA Petra Sdn Bhd and Hutchison Port Holdings Ltd to jointly develop the world’s largest STS transfer hub in Malaysia.

“I’m not sure [when he learnt about the project], but this project is one which will benefit Malaysia,” said Dr Mahathir, noting that it had been discussed for a long time. “I thought everyone knew,” he added.

The issue was raised after Johor Crown Prince, Tunku Ismail Sultan Ibrahim, shared a Facebook post by Gerakan Muafakat Johor, who wrote that the STS project was planned without the knowledge of the Johor government.

“There are a lot of Johoreans who are aware of this project, but he is unaware. I’m puzzled. He knows many things but this … he doesn’t know.

“So, if people don’t know. Well … I don’t have to go around telling people one by one if you know or not ... I don’t do that,” said Dr Mahathir.

Dr Mahathir also brushed off allegations that the government is practising cronyism.

“Everyone in Malaysia is my crony, as I’m working for everyone, including the Johoreans,” he said.

When asked if the project had been discussed with the Johor government, he said: “I want to know if the Johor government is going to reject this project, because so far they have not rejected this project, not officially.”

He added that Singapore is also aware of the STS hub, as the project had been in discussion for some time.

“There were problems, whereby Singapore said we were encroaching. We are in our waters and this is public knowledge,” said Dr Mahathir.

“We have shown them that this [project] is in Malaysian waters and not Singapore waters. And as far as I know, what we do in Malaysian waters, we are entitled.

“I was briefed about this last year, so I think other people would’ve known about it, because they have to ask for permission. And they are aware of this protest from Singapore. But, we have negotiated and have been talking with Singapore,” he added.

Meanwhile, on whether KA Petra has had any talks with the Johor government or the royal family regarding the project, its executive chairman Datuk Shahrul Amirul said there were none as the STS hub will be built more than 3.5 nautical miles away from the shore, within federal waters.

“The STS’ operations there … come under the jurisdiction of the federal government, and the governing authority of that area is Jabatan Laut,” said Shahrul.

Under the terms of the HoA, KA Petra will have 70% interest in this project, while Hutchison will hold the remaining 30% stake.

Based on preliminary studies, construction of the STS is estimated to cost between US$150 million (RM612 million) and US$180 million, which will be funded by internal funds and debt financing. Shahrul said while KA Petra has yet to work out the financing structure, the project is gaining a lot of interest from banks.

Construction will be done in phases with commencement expected within the next 12 months, according to KA Petra.

Shahrul said the ministry of transport has granted approval-in-principle for the project, with completion by 2021 targeted.

“The STS hub and the related businesses will attract many highly skilled Malaysians who are currently overseas, to return to Malaysia, and provide skills and training to the next generation of professionals in the maritime industry,” said Shahrul, adding that this project will create at least 3,000 jobs.

The hub, which will occupy a 3,000-acre (1,214.1ha) area within Johor Baru port waters, will be able to store over nine million tonnes of petroleum products and accomodate 30 berths.

Notably, it will also be the world’s first fully dedicated STS transfer facility.

With the International Maritime Organisation implementing IMO 2020, a regulation limiting sulphur content in marine fuels, from Jan 1, 2020, the STS will be well positioned to become a major trading hub in the region.

Shahrul added that the STS hub and activities in the maritime ecosystem will contribute an additional gross domestic product (GDP) of RM18 billion, or 1.5%, to Malaysia’s GDP annually.

This article first appeared in The Edge Financial Daily, on April 3, 2019.

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