Singapore's status as a premier shipping hub has received a significant fillip in a subdued global trading environment.
Cosco-PSA Terminal, a joint venture of Chinese shipping giant Cosco Pacific and PSA Corp, has decided to take even more space in the nation's next state-of-the-art shipping terminal at Pasir Panjang.
It had booked a two-berth terminal but has upgraded to three new mega container berths in anticipation of growing economic prospects from new trade initiatives.
The joint venture firm is investing in three new container berths here, which are designed to handle mega container ships.
The berths begin operations from next year and will be fully integrated with PSA's best-in-class infrastructure.
Mrs Josephine Teo, Senior Minister of State (Prime Minister's Office, Foreign Affairs and Transport), underscored the importance of the investment.
It is "strategically important to both partners and also a clear demonstration of their confidence in Singapore as an international maritime centre with a well-connected transhipment hub", she said.
Cosco Pacific, one of Asia's largest container terminal operators, is a unit of China Cosco Shipping, the world's fourth-largest container shipping line.
In 2003, Cosco Pacific and PSA signed an agreement to establish a two-berth terminal at PSA's Pasir Panjang Terminal.
"PSA needs to arrest shipping volume decline at its ports. It is losing shipping volumes to Malaysia. The deal with Cosco Pacific... is slanted towards Cosco to keep its transhipment volume in Singapore," said a shipping analyst at a local brokerage.
"Cosco Pacific being affiliated to China Cosco Shipping, one of the world's top five shippers, will help arrest that decline and ensure the commercial viability of the new port," he added.
Mrs Teo said she believes the project will contribute positively to China's Maritime Silk Road initiative and "One Belt, One Road" vision.
Proposed by Chinese President Xi Jinping in 2013, the "One Belt, One Road" initiative aims to spur development through building roads, railroads and other forms of connectivity along a continental route and a maritime route linking 65 nations in three continents.
Singapore sits on the sea route dubbed the "21st Century Maritime Silk Road" linking China with the South-east Asian region, South Asia, the Middle East and beyond.
The investment agreement was inked yesterday in Shanghai by Mr Qiu Jinguang, managing director, Cosco Pacific, and Mr Ong Kim Pong, regional CEO South-east Asia, PSA International.
It was witnessed by Mrs Teo, Mr He Jianzhong, Vice-Minister of China's Ministry of Transport, and several top executives of China Cosco Shipping and PSA.
Mr Ong noted that "Cosco Pacific was PSA's first joint venture partner in Singapore" and that the three berths have the "capacity and scale of operations to better serve shipping alliances and their mega vessels in this region".
This article was first published on March 29, 2016.
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