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Northport urges PKA to reconsider
withdrawal of ITT subsidy
The decision 13 years ago by Port Klang
Authority to subsidize the haulage services for
the Inter Terminal Transfer (ITT) of containers
between Westports and Northport was primarily
aimed at fostering the load centering at Port
Klang and promote the national port as a
regional transshipment hub.
The ITT charges were introduced for the
horizontal movement of containers by the
hauliers between the two port terminals for
containers that needed to be transferred, by
rail or by road, between the terminals to secure
onward transshipment connections provided either
by mainline or feeder vessels. This was
especially the case when Westport, (located 30km
from Northport) was established in 1992.
In an attempt to foster the development of this
transshipment trade, the Ministry of Transport
sought PKA to help subsidize the ITT charges for
hauliers, namely KTM Bhd which was asked to
“shuttle” the containers between the two
terminals. The current subsidy is RM80per 20-ft
container and /RM160 per 40-ft container) paid
directly to the hauliers, in this case to KTM
Bhd.
Without the subsidy, the full ITT charges would
be borne by shipping lines/agents which want
containers to be moved to the port terminal at a
particular shipping service is offered by the
shipping line.
“The development of the National Load Centre at
Port Klang has been a cornerstone of the
Government’s national port policy and therefore
the proposed move to withdraw this subsidy for
haulage services provided by KTM Bhd and
nominated hauliers could have serious
implication on the development of the national
policy,” said the Deputy Chief Executive of
Northport (Malaysia) Bhd, Encik Haris Abdul Aziz
He noted that it was at the behest of the
Ministry of Transport that the ITT charges were
subsidized by PKA in order to make it attractive
for shipping lines to call at either of the two
port terminals at Port Klang which supported the
Government’s desire to make Port Klang the
National Load Centre and Regional Transhipment
Hub.
“The withdrawal of the subsidy would therefore
undermine and impair the development of the
national policy with severe consequences
extending beyond port operations of the terminal
operators in Port Klang and potentially
impacting negatively on the economy,”.
Northport (Malaysia) Bhd is the port operating
company of Northport, at Port Klang which last
year handled a total of 2.70 million TEUs, of
which 37 per cent consisted of transshipment
traffic.
“We have invested much time and resources in
fostering the development of transshipment at
Port Klang including by leveraging on the lower
incidence of ITT charges to make it more
attractive for shipping lines to call at our
port,” he said.
“Undoubtedly the removal of the subsidy would
have serious cost implications to the
development of transshipment traffic at Port
Klang, particularly since transshipment is now
viewed as a driver of growth in traffic at Port
Klang,” he added.
He said coming as it does at a time when the
competition in the regional port system is
intense and on the ascent, the increase in cost
of transshipment contributed by the higher
incidence ITT would severely erode the
competitiveness of Port Klang as a regional
transshipment hub.
“We have requested PKA to reconsider its
proposed move to withdraw the subsidy on the ITT
charges which, we are all well aware, was
devised as part of a broader policy instrument
to further a national agenda and therefore an
unilateral decision to withdraw the subsidy
should be avoided and must take into account
sentiments of all stakeholders in the port,” he
said.
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