Beijing has earmarked one billion yuan (HK$1.13 billion) to develop a new generation of ships capable of carrying cargo from inland waterways to the deepwater Yangshan Port, as part of its efforts to develop Shanghai into an international shipping hub. The central government has enlisted the help of the China Classification Society, which is in charge of classification and certification of ships, to design and develop the new vessel, Huang Rong, a director of the Shanghai Urban-Rural Development and Transport Commission, said the weekend. The plan is aimed at saving transportation costs for exporters in the Yangtze River Delta and making better use of Yangshan Port. 'The central government strongly advocates the new river-to-ocean transportation mode and is determined to speed up its development,' said Mr Huang. 'The maritime authorities will help to make the ships travelling from the inland waterways more seaworthy.' Mr Huang did not elaborate on how the funds will be used but he did say that waterway shipping lines will receive subsidies to develop the new vessels. Most ships travelling on the Yangtze River are not seaworthy. According to research by the Shanghai People's Political Consultative Conference, less than one-third of cargoes going through Yangshan Port facilities are transported to or from the port using waterways. Most of the cargoes are delivered by road. 'If the cargo can be delivered to the ocean-bound vessels in Yangshan Port through waterways, the owners can save several hundred yuan per container,' said Zhou Shiyu, a manager at Shanghai YUD International Forwarding. 'The government will have to fine-tune the custom's clearance procedure before the business can really take off.' The State Council announced in late March that it would transform Shanghai into a global shipping centre by 2020. The city government has already rolled out tax incentives to international shipping lines and logistics companies in a bid to boost shipping business. Shanghai has scrapped a 3 per cent sales tax on ocean-going carriers, logistics firms and other agencies which register in the Yangshan Port area. The transport authorities were also deepening the waterway along the Yangtze River to enable the passage of large ships, Mr Huang said. Shanghai was the world's second-busiest container port last year with an annual throughput of 28 million 20-foot equivalent units, trailing only Singapore. The port was the world's busiest in terms of tonnage, handling a total of 582 million tonnes of cargo last year. 'The goal of becoming an international shipping centre will be achieved earlier than [government planners' hopes of developing the city as an international] financial centre,' said professor Liu Wei of the Shanghai Maritime University. 'With more policy support for the shipping sector, rapid progress can be made in the coming years.'