Malaysian ratings agency RAM Ratings has forecast that about MYR5bn ($1.2bn) would be needed over the next five years for the expansion of Kuantan Port, Sapangar Bay Container Port (SBCP) and Port of Tanjung Pelepas (PTP).
Funding requirements may even spike to MYR250bn if other mega-projects get off the ground, local media reported.
“This estimate may swell to over MYR250bn if large-scale projects such as the third Port Klang at Carey Island and the Melaka Gateway projects take off,” said the rating agency’s co-head of infrastructure and utilities ratings, Davinder Kaur Gill.
While noting that the financing needs of the Malaysian and regional port sectors would be massive if all the announced expansion plans are launched in the near future, she also expected these projects to have a gradual roll-out.
Davinder said Malaysian ports’ container-and cargo-handling prospects are expected to remain healthy in 2017 but growth would be in line with the pace of global economic recovery and throughput growth was expected to remain in the low single-digit levels, similar to the 3% seen last year.
“Prospects for the key national ports – including Westports Holdings, Northport (Malaysia) and Pelabuhan Tanjung Pelepas – remain stable, benefiting from the strengthening local and regional economic outlook,” she said.
“Nonetheless, in the immediate term they are still vulnerable to the effects of the current trend towards protectionism and changes in shipping alliances,” she added.
“While prospects for regional trade expansion are still encouraging, the long-term growth of South-East Asian ports must be analysed in the context of economic growth, the region’s upcoming new port capacity and the requirements of the newly formed shipping alliances,” Davinder said.
It was unclear where the funds would be sourced from. Kuantan Port is owned by a consortium consisting of IJM Corp, with a 60% stake and the remainder taken up by Chinese firm Beibu Gulf Holding (Hong Kong).
SBCP is part of the Sabah Ports Group, which in turn is a wholly-owned unit of Malaysian-listed Suria Capital Holdings.
Malaysian conglomerate MMC Corp has a 70% stake in PTP, with the remainder owned by AP Moller Maersk’s APM Terminals.