Singapore ready to lift controls on harbour tugs

PUBLISHED : Wednesday, 30 July, 1997, 12:00am
UPDATED : Wednesday, 30 July, 1997, 12:00am

Tug operators in Singapore are gearing up for major expansion if, as expected, the Maritime and Port Authority of Singapore opens up the harbour towage market to individual companies.

Hopes of deregulation have increased after tug operators were this month allowed to engage in inter-shipyard business, the Shipping Times reported.

Previously they were only allowed to provide towing services for their own affiliated shipyards in the port.

Shipping sources said it was only a matter of time before the Port of Singapore Authority (PSA) relinquished its control of harbour towage operations and allowed firms into the market.

These companies, which include the big three - Sembawang Maritime (SML), Keppel-Smit and Jaya Holdings - estimate the market to be worth about HK$420 million a year.

About 60 per cent of this will come from PSA cargo terminals with the remaining share coming from business won at shipyards and oil refineries.

These three companies alone have a fleet of more than 50 tugs, averaging less than five years old. This fleet is considerably bigger and younger than the PSA's tug complement.

Sembawang Maritime also is Hong Kong's second-largest harbour-towage firm.

An element of quasi-liberalisation has already occurred with the PSA chartering tugs from the major operators, who provide the tugs fully crewed, to help out with towage at busy times.

'We are already operators but working under the umbrella of the PSA,' SML marketing manager Jerry Koh said.

A key issue before liberalisation takes place is the need to co-ordinate tug services with ship schedules.

The PSA's information-technology network allows it to link towage and ship operations.

If deregulation is introduced tug operators are calling on the Maritime and Port Authority to set up a common computer network that can be used by the PSA and towage firms.

This will create a level playing field among all operators and not just benefit the PSA.

Shipping lines support the move towards deregulation because they believe it will lead to cheaper and more efficient towage.

The PSA already imposes a levy on its tug charters which constitutes about 20 per cent of the total harbour towage charge.

Many shipping lines believe this levy will cease to exist if liberalisation takes place and the resultant savings will be passed on to ship operators.

'Once the market opens up we can expect better rates for users,' Singapore Shipping Association executive director Daniel Tan said.

The PSA and tug operators, however, are against a price war, although all feel towage rates will come down.