Monday, 4 September 2017

Could Singapore’s port become irrelevant?

Singapore geared up to keep its spot as major port
Maritime & Port Authority of Singapore chief executive Andrew Tan says the emergence of alternative trade routes could affect trade flowing through the Strait of Malacca & Singapore, but the Republic's stable government, long-term & forward thinking, reliability & good track record are strong attributes to help it stay ahead of the competition. ST FOTO: NG SOR LUAN

Work is well under way to secure Singapore's future as a key port of call - most prominently in the form of the new Tuas mega port.

But these efforts may be met with some serious competition as neighbouring countries such as Malaysia & Indonesia take on or plan for a range of large-scale infrastructure projects that will vie for transhipment business in the region.

Malaysia, for instance, wants to build a giant port on an island next to its main Port Klang, while a new East Coast Rail Link (ECRL) has been touted as an "alternative trade route" that could see a projected 53 million tonnes of cargo bypass Singapore annually by 2030.

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Full steam ahead for new Tuas mega port
The Tuas Terminal will be developed in four phases over 30 years, with Phase 1 scheduled to be completed by the early 2020s. ST GRAPHICS

Works are in full swing at the future Tuas port, with reclamation ongoing for 2 out of 4 phases of the development and more than 3km of caisson already installed to form the wharf.

The caisson, which sits on a foundation on the seabed, is a 28m-high concrete watertight structure - about the height of a 10-storey Housing Board block. Using caissons to build the wharf structure is faster than traditional methods like piling.

In all, 8.6km of caisson will have to be constructed under Phase 1 of the Tuas port project, which aims to grow the Singapore port, amid competition from other regional & global ports.

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The Arctic route: What does it mean?

Climate change has allowed a Russian gas tanker to travel the Northern Sea Route without an accompanying icebreaker and in record time. The opening up of the high Arctic all year round shaves 30 per cent off the travel time through the conventional Suez Canal-Malacca Strait route, and has implications for global shipping

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The Northern Sea Route, Russia’s Coronary Artery
Russia’s Northern Sea Route holds the potential of boosting living standards in some of the country’s northern communities, but big infrastructure challenges stand in the way of boosting traffic along the route

MARITIME AFFAIRS OFTEN occupy a discrete place in global politics, but they function as the circulatory system of our world order. Great powers are made and unmade at sea, where wars are won and lost; goods, people and ideas spread; some of the most interesting principles of international law are developed; and the world’s ecosystems are regulated.

The importance of water – oceans, seas and rivers – also concerns Russia, even if the country is often perceived as a predominantly continental power with limited access to the open seas. One prominent scholar, Leslie Dienes, described Russia as an archipelago, with its few “islands” or nodes of human settlement, economic activity and political power separated from each other by impassable terrain. But while land acts as an obstacle, water connects these nodes to each other and to the outer world.

In this regard, Russia’s Arctic cities and settlements may be best connected in the country, lying at the mouths of great rivers that cut across the country and facing the Arctic Ocean. Framing Arctic communities in this way may be an exercise in paradoxical thinking, but it is necessary to understand the significance of the so-called Northern Sea Route – Russia’s frontier and its coronary artery.

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Future Development of the Northern Sea Route
ships in ice

On June 8, 2015, the Russian government released the Russia’s Integrated Development Plan for the Northern Sea Route 2015-2030. The plan stresses the importance of providing safer and more reliable navigation on Northern Sear Route (NSR) for maritime export of Russian natural resource materials but also the strategic importance of NSR for Russian national security. The plan is also to increase international transit cargo transportation on NSR in partnership with Asian countries and in particular with China.

The Ministry of Far East Development of Russia released a public tender in December 2015 for a detailed NSR’s feasibility and development study prepared by the Far East Development Fund. The study should be completed over a period of six months or by July 1, 2016. The organization chosen to complete the task was the Analytical Center for the Government of the Russian Federation. So Russian government’s future development plans for the NSR should become clear during the second half of this year.

Importance of NSR for Russian Energy and Industrial Development - A substantial part of the Arctic hydrocarbon resource potential is located in NW Russia and offshore in the Barents and Kara seas at the western gateway of the NSR. Current and future development of this Russian resource base is the main driver for increased shipping on the NSR in the coming decades.

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Northern Sea Route
Map of the Arctic region showing the Northern Sea Route, in the context of the Northeast Passage, and Northwest Passage

The Northern Sea Route (Russian: Се́верный морско́й путь, Severnyy morskoy put, shortened to Севморпуть, Sevmorput) is a shipping route officially defined by Russian legislation as lying east of Novaya Zemlya and specifically running along the Russian Arctic coast from the Kara Sea, along Siberia, to the Bering Strait. The entire route lies in Arctic waters and within Russia's Exclusive Economic Zone (EEZ). Parts are free of ice for only two months per year. The overall route on Russia's side of the Arctic between North Cape and the Bering Strait has been called the Northeast Passage, analogous to the Northwest Passage on the Canada side.

While the Northeast Passage includes all the East Arctic seas and connects the Atlantic and Pacific oceans, the Northern Sea Route does not include the Barents Sea, and it therefore does not reach the Atlantic.

Melting Arctic ice caps are likely to increase traffic in and the commercial viability of the Northern Sea Route. One study, for instance, projects, "remarkable shifts in trade flows between Asia and Europe, diversion of trade within Europe, heavy shipping traffic in the Arctic and a substantial drop in Suez traffic. Projected shifts in trade also imply substantial pressure on an already threatened Arctic ecosystem.

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Challenges facing Arctic will affect Singapore & the world: DPM Teo

Environmental & economic developments in the Arctic are of great interest to Singapore, as challenges facing the region will affect the country and the world, according to Deputy Prime Minister Teo Chee Hean.

He was speaking at the Arctic Circle Singapore Forum on Thursday (Nov 12), which discussed issues in the region.

The event was organised by Arctic Circle - a non-profit organisation co-founded by Icelandic President Olafur Ragnar Grimsson in 2013 - together with the Singapore Maritime Institute. The forum seeks to facilitate dialogue on the the Arctic.

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As Arctic Ice Vanishes, New Shipping Routes Open
As global warming melts sea ice across the Arctic, shipping routes once thought impossible — including directly over the North Pole — may open up by midcentury. But high costs may keep the new routes from being used right away.

The amount of sea ice covering the Arctic Ocean has declined sharply each decade since the 1980s, according to measurements taken each September when the ice is at its minimum. Older, thicker ice is disappearing as well. Scientists say global warming is largely responsible for the changes. Parts of the Arctic are warming twice as fast as elsewhere.

The changing conditions offer an opening to shipping companies. The Arctic is potentially a faster, more direct route between Asia and ports in Europe and eastern North America.

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Why the icy Arctic matters to Singapore
Ice floes in Baffin Bay above the Arctic Circle. Melting icecaps will submerge coastal areas in S'pore & affect shipping routes. Foto: AP/The Canadian Press

The Arctic may be remote, but melting ice caps caused by climate change will have far-reaching effects, submerging coastal areas in places such as S'pore and altering global shipping routes.

This has driven Singapore’s participation as a permanent observer in the Arctic Council in the last 3 years, and prompted preparations to adapt, said Minister of State (Prime Minister’s Office and Manpower) Sam Tan in an interview with TODAY.

“We have been given 1st-hand information by scientists that if the current trend continues, sea levels may rise by half a metre within the next 50 years, and by a metre within a century,” said Mr Tan, who has been the political office-holder representing Singapore in Arctic Council meetings.

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What is the connection between Singapore and the Arctic region?
Crew members of an icebreaker in the Arctic Ocean. S'pore & other parts of the world are quite closely connected to the Arctic because of climate change, global warming and weather patterns. Foto: Reuters/Nasa

One country is a small tropical island near the equator, & the other, an icy region near the northern tip of the Earth. But both Singapore & the Artic region share common concerns in climate change and global warming, with many potential areas for cooperation, said Minister of State (Prime Minister’s Office, Manpower) Sam Tan in a speech at the Arctic Circle Greenland Forum last week held in Nuuk, Greenland.

He listed several collaborations, such as the development of maritime infrastructure to facilitate safe shipping as new sea routes open in the Arctic, and exchanges between universities in climate change and sustainable development research.

Singapore has been a permanent observer on the Arctic Council since 2013.

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This Russian ship may spell the end of Singapore’s prosperity
 Set to sail in 2014, the Baltika is a vessel Singapore cannot ignore

The Northern Sea Route

The ship’s name is Baltika. You would expect this vessel to be a military one with advanced weaponry. It is not.

Baltika is an icebreaker. While conventional icebreakers do their job by sailing head-on or rear-on into ice, Baltika does so sideways.

This 76 million euro vessel was ordered by the Russian Ministry of Transport in 2011 and built by Finnish company Arctech. It is scheduled to be delivered to Russia in the spring of 2014.

Malaysia's ECR touted as a game changer
Land being reclaimed to expand Kuantan Port, which is central to the East Coast Rail Line project.FOTO: KUANTAN PORT

In a remote nook along Peninsular Malaysia's east coast, millions of tonnes of sand are being dredged up from the South China Sea to get Kuantan Port ready for the country's priciest infrastructure project yet: a RM55 billion (S$17.7 billion) railway link financed by China.

The East Coast Rail Line project (ECRL) will connect ports on the east & west coasts of Peninsular Malaysia & could alter regional trade routes which currently ply between the busy Strait of Malacca & the South China Sea via S'pore, officials say.

This potential game changer gives a glimpse of China's ambitions to expand its economic clout in Asia and beyond. And it explains why land is being reclaimed at such a frenzied pace at Kuantan Port.

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Could Singapore’s port become irrelevant?

In a feature story published last week in the Straits Times, the possibility that our seaport could become irrelevant given recent developments was brought up. In particular, Malaysia’s proposed Carey Island Port valued at RM100 billion, coupled with the proposed new East Coast Rail Link (ECRL) costing RM55 billion, could in theory mean that a projected 53 million tonnes of cargo would bypass Singapore annually by 2030. In the Straits Times map above, it would definitely seem that way. Goods coming from China and vice versa could completely bypass Singapore’s ports because a significant distance would have been saved. But thankfully, the reality is that cargo owners will find it very expensive to use this route. For example, they would have to unload their cargo at the proposed Carey Island Port, transport them via rail freight to the proposed Kuantan Port, and load the cargo onto an outbound vessel. The increased costs of transporting cargo via this route would definitely be substantial.

The other threat to Singapore’s ports is the proposed Kra Canal which cuts through the Kra Isthmus in Thailand. In theory, the Kra Canal could let ships skip Singapore and Peninsular Malaysia, and cut up to 72 hours of sailing time or 1,200km in distance. But the astronomical costs of building the Kra Canal, estimated at S$28 billion (S$38.2 billion), not to mention the engineering challenges, means that this proposed route is unlikely to materialise, at least in the mid- to long-term future. A more possible threat is the new shipping routes that appear after parts of the North Pole melt due to climate change. Currently, ships must travel via the Northern Sea Route which is controlled by Russia. By 2030, routes over the North Pole could open for ice-breaking cargo ships capable of operating in ice up to four feet thick. By 2045 to 2060, the decline of Arctic sea ice under moderate warming could allow even ordinary cargo ships to journey directly over the North Pole. New shipping routes could bypass Singapore and reduce travel time between Northeast Asia and Europe by up to two or three weeks.

All these developments pose challenges to the long-term success of Singapore’s ports. But while we should be cognisant of the competition posed by them, the political will, financial investment and innovative engineering required to surmount the numerous challenges in these large-scale infrastructure projects should not be discounted. It is heartening that Singapore has not stood still in the face of potential competition but has gone full steam ahead with the Tuas mega port, which will eventually house current operations at Pasir Panjang, Tanjong Pagar, Keppel and Brani container terminals. The new Tuas port will be opened progressively from 2021 and such forward planning certainly bodes well for Singapore’s future port operations.

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A Russian tanker has carried a cargo from Hammerfest in Norway to Boryeong in South Korea in 22 days, about 30% quicker than the conventional southern shipping route through the Suez Canal

related: New Silk Road 新絲綢之路 Xīn sīchóu zhī lù