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Is S'pore's Tuas port too big for its britches in today's environment?

QUESTIONS have been raised by the OECD's transport agency, among others, whether Singapore's Tuas Mega Port, currently under construction, is too big and costly to be effective in today's rapidly changing maritime sector

Is S'pore's Tuas port too big for its britches in today's environment?

QUESTIONS have been raised by the OECD's transport agency, among others, whether Singapore's Tuas Mega Port, currently under construction, is too big and costly to be effective in today's rapidly changing maritime sector

16 May 2019 - 19:00

QUESTIONS have been raised by the OECD's transport agency, among others, whether Singapore's Tuas Mega Port, currently under construction, is too big and costly to be effective in today's rapidly changing maritime sector.

A KPMG study argued that the optimal size vessel for the Asian market is 4,700 TEU, which is very different to the capacity of Tuas handling vessels that are four and five times the size, noted Singapore's Splash 247.



The OECD's International Transport Forum (ITF) warns that costs of mega ships could be substantial because of heavy investment needed terminal infrastructure considering Tuas is competing in a cost-based sector and region.



The importance of the decision by terminal operator PSA to embark on such a project that essentially consolidates the five existing container terminals into one precinct is a big step.



The ITF report, entitled Megaships: Trends and Rationale goes on to argue that the cost savings are decreasing as ships get bigger.



The savings of the latest generation vessels are four to six times smaller than the savings from the previous round of upsizing. Interestingly, the report states that 60 per cent of the savings come from more efficient engines and not to ship size.



The report also says any increase in the maximum size of containerships would raise transport costs due to the costs associated with infrastructure upsizing.


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