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[Loydlist Marinetime Asia :
November ,2002]
Tony Gillotte in Bangkok
erports on sweeping initiatives to enhance Thailand’s cargo
handing
capabilities
Seeking to keep his election compaign promise to improve
government efficiency, Prime Minister Thaksin Shinawatra
recently pushed through the most far-reaching bureaucratic
reform package in recent memory and one that could have a
major impact an the Thai maritime
sector.
The two main bureaucratic reform laws signed into law in
October were the Restructuring of Government Agencies Act and
the National Administrative Regulations Act. “We have
reached a point where we must be able to act quickly to take
advantage of the opportunities that await us, says Dr. Ruth
Banomyong, professor of Thammasat University. “Especially
with Intra-Asian trade growing fast, the ASEAN Free Trade
Agreement coming into full effect, with China joining the WTO
and other new markets opening up”
Transport
reform
THE INITIAL IMPACT has been dramatic. The old MOTC for
example, has lost half its name to become simply the Ministry
of Transport (MOT) The new MoT has been completely
reorganized with Suriya Jungrungriangkit appointed with
Minister of Transport, and two new deputy ministers who will
now oversee seven related transport
departments.
Although no new maritime policies have been announce yet
observers say a feeling of sweeping changes permeates the air
within the MoT’s maritime departments. The emphasis say
observers, will be on clear goals and strategies, with
transparent practices intended to ease corruption problems. If
got, Mr. Thaksin has vowed that heads will
roll.
“We think the Minister of Transport will now be able to employ
faster decision making and quicker analysis of problems in the
maritime sector” says Teerayudh Dummanonda, newly appointed
managing director of Laem Chabang Port (LCP)
Success at Laem Chabang
Port
On The Strength of a steadily improving Thai economy LCP has
become an unabashed maritime transportation success
story.
LCP’s throughput totaled 2.7 m teu tor fiscal year 2002, up
from 2.3 m last year. Growth is expected to continue at over
10% next year, reaching nearly 3.1 m teu. Recently, the US
Customs Department nominated LCP as one of the top 20 ports in
the world, making it eligible to be included in the new US
security initiatives
proposal.
And LCP has also been listed among the top five lastest
growing ports worldwide. “We can do nearly everything that
Singapore and Hong Kong can do.” Says Mr. Teerayudh, “Our
productivity is high (average of 25-27 lifts per hour) and our
costs (port tariffs) are
cheaper.”
Opened in 1992, and situated on the eastern seaboard of the
Gulf of Thailand, LCP is a sprawling, modern deepsea facility.
The LCP masterplan calls for a coordinated Phase II and III
expansion program. When completed, LCP will be able to handle
8m containers by the year 2020. But, that figure may be in
need of serious revision, according to recent growth
projections.
“We recognise that LCP’s Phase Interminals (B-1 to B-5) have
reached full capacity.” Acknowledges Mr.Teerayudh, “and as
Thailand’s economy continues to grow, we will need more
operating
terminals.”
After three apparently premature offerings last year, LCP has
once again opened its Phase II, C-3 Terminal for bids. With a
deeper draft (14m) to handle post panamax side vessels, C-3
has attracted four bidders (PCIT, TIPS, Hutchison Port
Holdings and Bangkok Modern Terminal). A Port Authority of
Thailand (PAT) committee will announce the winning bidder by
the end of
November.
Remaining Phase II terminals (C-0, C-1, C2 and D-1, D-2 and
D-3)have been compieted and are awaiting their new private
sector occupants, following the LCP masterplan time schedule
or the demands of the
market.
But, a new approach to terminal concessions is being bandled
about, one that could also lower freight rates “With post
panamax vessels getting bigger and bigger,” says Mr Teerayudh,
“I have proposed to offer an entire block of Phase II
terminals (D-1, D-2 and D-3) t the highest bidder. So far,
Maersk Sealand has shown interest in this
idea.”
Meanwhile confusion reigns over LCP’s A-5 Terminal, where Nam
Yuen Youg Co, the local agent for COSNAM, was reported to have
bought the concession contract from Banpu plc, a Thai energy
company which used the terminal as a 10-10 facility and to
import coal for its power
generators.
Observers say Nam Yuen Yong has entered negotiations with PAT
to change A-5 to container usage. But, PAT’s asking price to
make the switch is reported to be in the neighborhood if 1.4bn
baht ($33.3m). Negotiations continue.
Exports
up
Thailand’s economy continues to bounce back nicely, especially
compared to US and European economies. This makes it not
entirely unreasonable to expect export volumes to continue
apace. Commerce Minister Adisoi Bodharamik expects the
country’s export value to grow by as much as 4.5% to $68.12 bn
this year, higher than the previous projection of 3.5% to
$76.64bn
Multimodal
nexus
The key to understanding LCP’s success has two elements.
First, the continued growth of eastern seaboard industrial
zones, which tunnel a wide variety of goods including
electronics, more and more automobiles, spare parts and
garments to LCP and secondly the increasingly efficient road
and rail connection between Lad Krabang inland container Depot
(LKB ICD) and
LCP.
Since LKB ICD opened in 1995, many Bangkok metropolitan area
shippers have switched from using Bangkok Port (BP) to
bringing their containers to LKB ICD, where they are processed
and put on loaded trucks or trains for a quick trip to
mainline vessels calling at LCP terminals, only 127 km
away.
“This transport corridor utilises the quickest container
processing and delivery system in Thailand” says Suvit
Patanachinda, chief executive officer of Profreight int’l ,
which operates a terminal at LKB ICD. “And it relieves Bangkok
of excess traffic congertion and
pollution”
LKB ICD, located only 25 km east of Bangkok, has six
terminals, which are operating at near full capacity. “Our
(TIFFA ICD) terminal is handling approximately 13,000 boxes
per month,” says Mr.Suvit, “and the terminal’s capacity is
15,000 tue. We expect LKB ICD to handle over one million boxes
by the end of the
year.”
The State Railway of Thailand (SRT) landlord of LKB ICD, has
already drawn up plans to construct a nearly duplicate sized
facility just month of the original
site.
The project, estimated to cost $78.6m, has been approved by
parliament and awaits final cabinet
endorsement.
Meanwhile, at the LCP end of the rail line, PAT has urged the
creation of a new single rail operator (SRO), which would
perform the lift-on and lift-off box services now provided by
the LCP
terminals.
Others, however, disagree about the value of this project. “We
don’t need it,” says Chris Langford, ceo of Laem Chabang
international Terminal Co.,Ltd (LCIT), the largest terminal
operator at LCP. “It will cause more problems than it solves
and it will cost
more”
While rates are nearly competitive between trucks and rail
service to LCP, trucking costs remain lower for two-way trips.
Currently, 20% at containers from LKB ICD are carried by rail
to LCP, while 80% continue to use trucking
services.
Meanwhile, the SRT is constructing it double tracking system
that will make it. Easier for trains to make two-way container
deliveries and lower delivery costs.
Bangkok Port Threatened
Post world war two, BP became fully established as a thriving
river port facility, busily supporting Thai economic growth
until it reached its box handling peak of 1.4 m tue in the
early
1990s.
BP ushered Thailand into the modern era of containerisation,
but its central city location caused huge trafffic congestion
and pollution in Bangkok. Meanwhile, the Chao Pharaya river’s
draft limitations made it inadequate to carry the nation’s
growing national economy into the globalisation era – a new
deepsea port was needed. Today, the two ports have
dramatically reversed their roles, with BP losing a high
percentage of iots container volume to
LCP.
Some observers have even suggested that BP ought to close.
Others say it should join forces with its deepsea rival by
moving its opreations to a terminal at LCP. While BP’s days
may be numbered there is also a strong political factor
involved (unions, civil service bureaucracy vested interests)
which keeps BP’s hopes alive to remain where it
is.
“I think it would be best for BP to move its throughput and
staff down to LCP.” Mr. Teerayudh says. “That way our higher
volumes could attract larger vessels to LCP and recure freight
rates.”
While BP has not solved all its problems, its recent efforts
to transform itself have been encouraging “We have established
new small and medium enter prises (SME) services, added cold
storage facilities, bonded warehouse space for the private
sector.” Says Mana Patram director general of
PAT.
BP’s throughput is forecast to react 1.1 m teu by the end of
calendar year 2002, up from last year’s figure of
1m.
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