10 January 2013

Mr Michael Chia, Chairman, Singapore Maritime Foundation

Friends of the maritime community,

Ladies and gentlemen,

Good evening. I am happy to join you in your New Year celebrations.

Port and Maritime Performance in 2012

2012 was another challenging year for the maritime sector. Demand for shipping remains volatile as the global economy struggles to recover. Weak freight rates, together with high fuel costs, excess tonnage and environmental concerns, continue to weigh down the industry. On the bright side, there continues to be strong growth in the offshore and marine sectors.

As a key transhipment port at the crossroads of major trade routes, Singapore is not spared the effects of the uncertain global economy and the challenges faced by the global maritime industry. But I am greatly encouraged that overall, Maritime Singapore has nevertheless registered good growth in 2012. Our advance estimates indicate that our container throughput for 2012 crossed the 30 million TEUs milestone to stand at 31.6 million TEUs, a historic high for the Port of Singapore. We also maintained our global lead in vessel arrival tonnage with 2.25 billion gross tons (GT) for 2012, an increase of 6.1% from 2011. Singapore also remained the world's top bunkering port with 42.7 million tonnes in total bunker sales for 2012.

As one of the world's leading International Maritime Centres (IMC), we continue to be attractive as a location for maritime companies, with over 5000 companies offering a diverse range of services established in Singapore to date. The shipping companies and maritime service providers which we welcomed last year include ship operators, Trafigura Maritime Logistics Pte Ltd and Castleton Commodities Shipping Co Pte Ltd; ship-owner and operator Kambara Kisen Singapore Pte Ltd, maritime legal practice Reed Smith, and the Iyo Bank from Japan. A number of maritime players have also expanded their operations and functions in Singapore such as Credit Suisse AG which set up a ship finance desk and relocated its Global Co-Head of Ship Finance to Singapore. These developments amidst challenging times reflect the strong fundamentals and resilience of Maritime Singapore.

Initiatives in 2012 to Strengthen Maritime Singapore

The Singapore Government remains committed to supporting the growth of Maritime Singapore and we take a long-term view towards developing our Port and IMC. Notwithstanding the current market outlook, we continue to grow capacity ahead of demand to sustain our competitiveness as a global hub port. The expansion of Pasir Panjang Terminal's Phases 3 and 4 are on track, with the first berth ready for operation by 2014. Also, we recently announced long-term plans for the development of Tuas Port that will consolidate Singapore's container terminal operations at one location. This consolidation will increase efficiency through greater economies of scale and provide the opportunity to introduce new technology and processes to meet the future challenges of container shipping.

To strengthen Singapore's attractiveness as a leading IMC, we have enhanced the Maritime Sector Incentive schemes to include exempting vessel disposal gains derived by qualifying ship operators and ship lessors from tax, and granting automatic withholding tax exemption for interest and related payments on foreign loans obtained to finance the acquisition of qualifying containers and intermodal equipment. As Michael has mentioned, our IMC has also benefited from the introduction of the Singapore Ship Sale Form and BIMCO's recent recognition of Singapore as an arbitration venue in its new and revised forms.

To support the industry's manpower needs, the Maritime and Port Authority of Singapore (MPA) introduced several enhancements last year such as increased co-funding support for maritime training under its Maritime Cluster Fund and a new training programme for Marine Engineer Officers.
We are also making good progress in promoting maritime R&D in Singapore. The Singapore Maritime Institute (SMI) has established Maritime Institutes within the Nanyang Technological University, National University of Singapore, Ngee Ann Polytechnic and Singapore Polytechnic, to drive maritime research and education. SMI has also signed an MOU with MPA and BW Ventures to develop a Green Marine Innovation Centre, which will support our industry's commitment towards sustainable shipping. This commitment has been affirmed by 40 companies that signed the Maritime Singapore Green Pledge and we hope to see more industry partners come on board.

On the international front, MPA successfully hosted the 5th Co-operation Forum last October. This Forum brought together international stakeholders to further enhance the safety of navigation and environmental protection in the Straits of Malacca and Singapore.

Conclusion

Ladies and gentlemen, the success of Maritime Singapore is due in no small part to your contributions and those of many more industry partners. As we embark on a new year, let us strengthen the tripartite partnership between the Government, the industry and the unions. By working closely together, we will be in a better position to weather the rough seas and further develop Singapore as an International Maritime Centre. On its part, MPA will continue to invest in initiatives to help strengthen the capabilities of maritime companies, so that Maritime Singapore will be well-positioned to seize opportunities when the shipping industry recovers.

I thank the SMF for organising today's gathering, and wish everyone a good year ahead. Thank you.