Published 9 March 2011
The Business Times
By Joyce Hooi
As major transhipment hub, Singapore well-placed to capture higher trade volume
SHANGHAI might have overtaken Singapore as the world’s No 1 port last year, but it did not do so at Singapore’s expense, Second Minister for Finance and Transport Lim Hwee Hua told Parliament yesterday.
Mrs Lim was responding to Lim Wee Kiak, chairman of the Government Parliamentary Committee for Transport, about whether there was cause for concern over the shift in port ranking in terms of the number of containers handled. Last year saw Singapore slipping into second place behind Shanghai for the first time since 2005.
‘China’s prosperity will continue to be a plus for us as a significant portion of our container volumes comes from or goes to destinations in China. As a major transhipment hub, Singapore is well-placed to capture the growing trade volumes of not just China, but the rest of Asia as well,’ said Mrs Lim. The 10 per cent increase in container volumes going through Singapore’s ports last year bears testimony to that, she said.
For future growth, the government is ‘pressing ahead with the expansion of the Pasir Panjang terminals’, said Mrs Lim.
‘Beyond Pasir Panjang, we will explore if longer-term needs could be met at Tuas.’
While Nominated Member of Parliament Teo Siong Seng – who is also president of the Singapore Shipping Association – lauded the introduction of a goods and services tax scheme that will zero-rate supplies of goods to certain marine customers, he had his reservations about the Maritime Sector Incentive (MSI) for new ship operators.
These operators under the MSI will get a tax incentive that is valid only for five years and cannot be renewed. Currently, their existing and larger counterparts enjoy 10 years’ worth of tax benefits under another scheme: the Approved International Shipping Enterprise (AIS) scheme.
‘We understand that this is based on the assumption that, before the end of the fifth year, these companies will have grown in size so as to qualify for the main AIS tax incentive,’ said Mr Teo.
‘However, the past two years have shown that shipping is heavily dependent on the health of the global economy. If these companies are marginally unable to meet the AIS criteria, could some form of grace period be given?’
Mr Teo also highlighted the need for more incentives for the shipping community in order to encourage the hefty investments necessary for green technology in shipping to take off.
‘A new ship can easily cost over US$100 million, and installing new green technologies and features can add up to 30 per cent of the cost,’ said Mr Teo.
In response, Mrs Lim said that the government would be willing to look at the possibility of providing incentives to early adopters of green shipping technology.
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