PM Lee Hsien Loong at PSA 'Towards Tuas' Bicentennial event

Mr Peter Voser, Group Chairman, PSA International
Distinguished guests
Ladies and gentlemen

I am very happy to be here today to celebrate a new chapter in PSA’s history – the beginning of development work for Tuas Port. This is an appropriate time to celebrate because this year, we are also commemorating our Bicentennial.

Singapore has always been a port, even back in the 13th century when it was known as Temasek, before it became Singapura. The port continued to flourish in the 16th and 17th centuries. When the Flemish gem trader Jacques de Courtre sailed past Singapore in 1593, he observed that “heavy maritime traffic flourishes with many ships from different kingdoms”.

Later the port entered a period of decline when Melaka became the region’s key port of call. When Stamford Raffles came in 1819, he saw the promise of our location and the natural deep harbour, so he decided to found a free port here, and that made all the difference. With that, Singapore took off.

Free trade has been critical to Singapore’s success. Initially we were an entrepot for our immediate region, trading in raw commodities like rubber, tin, coffee, rice and spices. After independence, there was a time when we thought that the entrepot trade had no potential, because our neighbours were developing, building their own ports and developing their own direct links to markets. They would bypass Singapore, and our trade will stagnate. So we turned our focus to industrialisation, to generate the jobs for our growing workforce.

Industrialisation succeeded, and proved crucial to our economic development. But we were wrong to be pessimistic about the port. The port reinvented itself. The Singapore Harbour Board became the Port of Singapore Authority, and later PSA. We moved early on containerisation, which increased our efficiency, and we built up our transhipment business, so that our hinterland was no longer just the immediate region but geographies much farther away.

As our neighbours prospered, our trading links with them grew too, and container volumes went up steadily year after year, because PSA provided good and efficient service.

So our port grew from strength to strength. PSA sharpened its competitive edge and kept its customers, because businesses knew that PSA did it better than anyone else. We grew from just 1 million TEUs in 1982, to 6 million a decade later, to more than 36 million TEUs last year. With Tuas, we will be able to handle almost double that. Officially, Tuas is designed to handle 65 million TEUs, but I am sure if PSA works hard, you can squeeze a little more out of it.

Our port is critical to Singapore’s economy. Today PSA connects Singapore to over 600 ports in 120 countries. This high connectivity makes Singapore a key node in the global supply chain. PSA gives companies the assurance that they can source for supplies and export their goods from anywhere to anywhere in the world. They can streamline their supply chains, avoid holding excessive inventory, and reduce deadweight transit time for shipments. The port is a nucleus for the maritime ecosystem: shipping lines, finance companies, insurance companies, maritime law experts, commodity brokers, ship surveyors and shipyards, all of which strengthen our proposition as a maritime hub, and create good jobs and opportunities for Singaporeans.

So PSA makes a much wider contribution to the economy than most other companies, and that also means that even as you strive to improve your bottom line, you must never pursue short term profitability at the expense of long-term viability and competitiveness. PSA must never forget this dual mission.

While PSA is today a very successful company, this was not always a forgone conclusion. When we started building the first container port in Tanjong Pagar in 1966, there was much scepticism. The World Bank had concerns that our plan was too far-fetched. They did eventually give us a loan for the project, but PSA had to supplement it from its own bonds. We took the risk because we knew containerisation was already happening rapidly in the US and in Europe.

We had a narrow and closing window to secure first-mover advantage in our part of the world. In the end, Tanjong Pagar Terminal greatly exceeded our expectations, and this gave us the confidence to expand our container port further.

Looking ahead, Tuas Port is our next bold move. In Tuas, all of PSA’s operations in Tanjong Pagar, Keppel, Brani and Pasir Panjang, will be consolidated into the world’s single largest container terminal. It is around the size of two Ang Mo Kios, tucked into the southwestern corner of Singapore. Costing well over $20 billion, Tuas Port will be developed and built in four phases, and will be fully operational in the 2040s.

While scale is critical to competitiveness, the move to Tuas goes beyond just having a bigger terminal. Tuas Port is also an opportunity to peer over the horizon and rethink the future of shipping. Because the port will be on a completely greenfield site, we can design from a clean slate and make innovation and sustainability key features. Tuas Port will also give us sufficient capacity to anchor shipping lines and alliances, and host the world’s biggest container ships. The first container ship to dock in Singapore, the MV Nihon, could carry around 2,000 containers.

Today’s largest container ships can carry more than 10 times that- 24,000 containers. Tuas Port will be able to accommodate not just these biggest class of vessels, but even bigger ones yet to be built.
We have set aside space in Tuas to integrate the port with industry, so companies can benefit from being close to the port and its wider ecosystem, like the way we have an industrial area around Changi Airport. We hope such co-location will synergise business opportunities and improve services, and this will give us more room to create customised logistical arrangements, for example inter-modal sea-air cargo to take advantage of our air hub.

Generations of Singaporeans, working in PSA, MPA, MOT and the maritime industry, have contributed to this success. Many of you took part in the torch relay this morning, starting from Tanjong Pagar Terminal. These staff have worked loyally over the decades because PSA takes good care of its workers. In the 1950s, when PSA was Singapore Harbour Board, the port workers often went on strike because of low wages and adverse working conditions. Over the years, PSA and the unions worked hard to develop a close cooperative relationship. Bit by bit, you won their hearts, and built trust. In turn, PSA reaped efficiencies, implemented the latest technologies and expanded to new terminals. Your workers took these dramatic changes in their stride, and adapted to them to become more productive, and to improve their earnings.

The port workers and officers, and the port unions have become your partners. This is how you have become the world’s biggest transhipment hub and the second busiest port. I remember once receiving a visitor who was a British unionist. This was in the late 1980s, I explained to him how we worked with our unions, we made sure we were cooperative and our port prospered and thrived, and we move forward together. I think he was completely confused, because in the 1970s and 1980s in Britain, port workers like the London dockers, regularly went on strike. As a result of which, London is no longer a major port in the world. New ports have come up in Britain - like Felixstowe, which operate on a different model. But we went on the right way and it brought us here.

Now that PSA is moving to Tuas, your workers are understandably anxious about this major move. Not just about whether they can cope with new-fangled technologies, like autonomous vehicles and artificial intelligence, but also about practical matters like transport arrangements - to and from work. You are in the transportation business, but transport to take you to and from work is something which you depend upon. The Tuas West Extension has brought the MRT closer to Tuas South, but Tuas South is quite far from Tuas West.

LTA has introduced two new bus services to connect workplaces in Tuas South to these new MRT stations. We have longer term plans to improve transport connectivity in the western part of Singapore, but these will take some time. Meanwhile, I want to assure all PSA staff that the Government is working closely with PSA and the unions to make sure that you can get to work comfortably and conveniently. It is the least that we can do to acknowledge your contributions and sacrifices, as you prepare for this next major move.

Building Tuas Port and its ecosystem is an immense undertaking, but we can achieve this, if we have the same daring and ambition as our pioneer generation of port planners and engineers. PSA’s competitors are not standing still. They too are investing heavily in automation, and expanding rapidly. We need the best minds to work with us to maintain PSA’s dynamism.

We need people like Stephen Lee, who was your chairman from 2002 to 2005. At a time when PSA was facing fierce competition, Stephen had to take difficult decisions to restructure and refocus the company, to cut costs, to improve productivity and secure your long-term competitiveness.

He did not do this alone. In particular, Stephen worked closely with the unions, including union leaders like Ong Chin Ang, Jessie Yeo and Ong Kuan Peng, to convince the workers what needed to be done and to give them confidence that there was a way forward for the company. Fortunately, the measures worked, and PSA pulled through. I am very happy that Stephen is here today. Chin Ang is not able to be here, but Jessie is here, and so is Kuan Pheng. Thank you to them.

PSA was also fortunate that Stephen was succeeded by another able chairman - Fock Siew Wah, who recently retired. Siew Wah was extremely dedicated to his work and crystal clear about the national interest. Over the last 13 years, he presided over PSA’s rapid international growth, forged strategic relationships around the world, and guided PSA to build a strong balance sheet, even through difficult times like the Global Financial Crisis.

I want to express my sincere thanks to Siew Wah for steering PSA so ably and for ensuring a smooth transition to Peter. I have known Siew Wah for many years, long before he became PSA Chairman. My first job, when I went to MTI to chair the economic committee, and Siew Wah served with me on the committee. I got to know him, and he has not escaped ever since. Thank you, Siew Wah.
I hope younger Singaporeans will seriously consider careers at PSA, MPA, or one of the other companies in our maritime ecosystem, including the many start-ups working in an area in BLOCK71 that we have carved out for the maritime industry, and named PIER71.

You have the opportunity to write the next chapter of Singapore’s maritime history, and fill it with your hopes and dreams. The Port of Singapore is here to stay, and PSA is here to stay too. It may move around in Singapore, but it will be here.

Congratulations again to PSA on this historic occasion. I wish you all the best as you scale new heights. Thank you.

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