The ambitious RM140 billion Carey Island port—slated to be the third port in Klang—has been shelved by its main promoter MMC Corp, as reported by The Straits Times.
This is mainly due to falling cargo volume at Port Klang—both at Westports and Northport—with new global shipping alliances shifting operations to Singapore since April 2017. If the slide in cargo volume continued, Klang would only handle about half its full capacity this year, the reports states.
The Malaysian government has also recently given rival Westports approval to double its capacity.
The Carey Island ‘Maritime City’ project, announced in January this year, would have housed a 30-million TEU-handling port and was intended to challenge Singapore’s dominant position as Southeast Asia’s maritime hub.
MMC Corp, led by Syed Mokhtar Albukhary, was earlier announced to be partnering India’s Adani Ports and government-controlled Sime Darby for the mega project.
The decision to pull the brakes is seen as prudent, with stiffer competition in the Strait of Melaka, one of the busiest shipping routes in the world.
“The infrastructure for a mega-development like Carey Island is extremely capital-intensive … and within such a long time horizon, there are just too many macro-trends, which can disrupt the expected business case and projected paybacks,” said CTI Consultancy partner Andy Lane, as quoted by The Edge Markets.
“Malaysia needs to be wary of the ‘China debt trap’ risks, as have been experienced by Sri Lanka. So to cease progress on Carey Island is the sensible thing to do today,” Lane added. — Construction+ Online
