Kaohsiung Free Port Zone Business Alliance Conference President Chen Shui-bian's inauguration speech on May 20, 2004

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1 Kaohsiung Free Port Zone Business Alliance Conference On May 14, at the Grand HanLai Hotel Kaohsiung Harbor Bureau and Kaohsiung Customs Office held a joint business alliance conference entitled From a Foothold in Taiwan, expand around the Globe in an attempt to promote business in the Kaohsiung Free Port Zone. In addition to high-ranking officials from the Ministry of Transportation Communications-related departments and the Kaohsiung City government, invited guests included presidents and representatives from shipping companies and directors from shipping industry-related institutions, and local scholars. In total, more than 220 people participated in the conference. Throughout the conference, KHB and the Kaohsiung Customs Office provided participants with relevant and up-to-date information on all aspects of Kaoport operations. Significantly, there are ten companies expressed great interest in the future prospects of the KaoPort and signed a Letter of Intent of operation in the Free Port Zone, including Yang Ming Marine, Taiwan Hanjing, Lien-Hei Co.,Ltd, CCT corp, Yes Logistics, Trust Logistics Corp., Asia Pacific Container Terminal Inc, Union,etc. According to the blueprint provided by KHB and KHCB, applications to operate in the Free Port Zone will be accepted from the third quarter of 2004, and all reviews completed by the fourth quarter, in preparation for the formal commencement of operations next January. Those firms intending to operate a business in the Free Port Zone will be offered assistance by KHB. Furthermore, KHB will continue to negotiate with related departments in order to provide more preferential measures and a better operational environment. President Chen Shui-bian's inauguration speech on May 20, 2004 Attended by 200,000 supporters and delegations from 15 countries, President Chen's inauguration ceremony was held on May 20, Badges and national flags given out at the ceremony were in harmony with the DPP's Party flags, which signified the consensus of the people of Taiwan. The most noteworthy remarks Chen made were focused on cross-strait issues and constitutional reform, which will be among the top priorities of the new administration.

2 President Chen declared that his re-election victory brings responsibility and self-examination; also that the new administration will strive to stabilize cross-strait relations and reinvigorate the economy. Adding that his plans for the next four years will be to the mutual benefit of Taiwan and the US, he said he expects to make a great contribution to security and peace in the Asia-Pacific area. Continue Growth for Kaoport The growth of containerized cargo for the port of Kaohsiung continued in the second. Quarter of 2004 compared to Imports increased by 9.76 compared to last year. Exports increased by 13.09, Transshipment increased by while the total (imports/export and transshipment) increased by over the same period last year. The actual TEU figures for second quarter of 2004 were 617,683 TEU for imports, 587,692.5TEU for exports and 1297,711 TEU for transshipment and 2,503,086.5TEU for the total. KaoPort s ISPS and Anti-terrrorism exercise In accordance with the special measures to enhance maritime safety adopted by the International Maritime Organization IMO and the International Ship and Port Facility security Code ISPS, KHB conducted ISPS and anti-terrrorism exercises at Wharg No. 4 on May 28, Since the World Trade Center was attacked in Sip. 11, IMO adopted Chapter Xi-2 s special measures to enhance maritime safety of the IMO s International Convention for the safety of Life at Sea SOLAS, and required all the members to implement a Port Facility Security Plan on July 1, 2004 in compliance with international standards. KHB has completed its Port Facility Security Plan in accordance with the ISPS Code and obtained approval of the MOTC, and is scheduled to be carried out on July 1, 2004.

3 Based on ISPS Part A Chapter 18 and Chapter B No. 18, the exercises were to examine the feasibility of Port facility Security Plan, security defects, and the ability to mobilize a response instantly. One scenario posited was a Post-Panama Star container vessel docking at Berth No. 4 is suddenly hijacked and forced to steer out to sea under threat of a bomb. The exercise covered a security declaration, notification of a security situation, and the establishment of a contingency committee, as well as overall crisis management. This exercise was coordinated with military, police, and customs facilities in the port areas, under direction of the MOTC Port Facility Security Committee. In addition, representatives from other domestic ports and Port Facilities participated in the exercise in the interests of improving Security and anti-terrorist responses island-wide. OOCL HAMBURG makes first call at Kaohsiung Port Orient Overseas Container Line s SX-Class OOCL HAMBURG made its maiden voyage to Kaohsiung Port from the port of Long Beach in America and berthed at Wharg No.65. General Director Huang of KHB presented commemorative plaques to express a warm welcome. OOCL HAMBURG is of the same class as OOCL Shenzhen, one of eight sister ships owned by OOCL. One of these SX-Class ships, OOCL Long Beach, called at KaoPort in August, OOCL HAMBURG, registered in Hong Kong, was constructed in March, She has a gross tonnage of 89,092 tons, a length of 309 meters, a width of 43 meters, and a draft of 12 meters. The new 8,000 TEU vessel will ply the route between the Far East and the West Coast of the United States. Maiden Voyages of YM GREAT and YM MARCH to KaoPort Yang Ming Group's YM-GREAT and YM-MARCH arrived at Kaohsiung Port from Hong Kong and berthed at Wharf No. 70. General Director Huang of KHB welcomed their arrival by presenting them with two commemorative plaques. The two Post- Panamax full container vessels were built in Japan and delivered in March and May, 2004 respectively. They both have a gross tonnage of 66,332 tons with a length of 279 meters, a width of 40 meters, and draft of 14 meters. Maximum speed is 25 knots and load capacity is 5,576 TEU. The two vessels will enter service on the Kaohsiung- East America route in the near future. In recent years Yang Ming Line has been actively decommissioning older vessels and buying new vessels to cope with intense competition in the shipping market. This year, three more members of the same family of 5,500 TEU container vessels, YM WEALTH, YM GREAT, and YM MARCH, joined the fleet. Two more vessels being built by China

4 Shipbuilding Corporation will be delivered in July this year to provide customers with better service. Celebration of Kaohsiung Port's 140th anniversary The Kaohsiung Harbor Bureau, together with the Kaohsiung City government, recently celebrated Kaohsiung Port's 140th anniversary. Numerous activities centered on the port commenced on May 8, 2004, most notably a spectacular procession of ships- both past and present passing through the harbor. The passage of the impressive fleet evoked memories of Kaohsiung Port's long and colorful history. 20th anniversary of the Kaohsiung Cross-Harbor Tunnel The Kaohsiung Cross-Harbor Tunnel, built in 1984, has been opened to traffic for 20 years. In view of its great contribution to the national economy, KHB invited distinguished guests from the shipping industry to celebrate its 20th anniversary of operations at the Ambassador Hotel. The Cross-Harbor Tunnel connects container Terminal No.3 to the Chunghsiung Commercial Port Area on Chichin Island via a 440 meter wide, 14 meter deep thoroughfare. It was the first cross-harbor tunnel in Taiwan. The Cross-Harbor Tunnel plays an important role in the economic life of Kaohsiung, since it not only links the city to KaoPort's fourth Container Terminal, but is also the main thoroughfare for Chichin island residents to reach Kaohsiung. In order to maintain the Cross-Harbor Tunnel in optimum condition and provide shipping companies and residents with better service, this year KHB has drawn up a budget to renew and replace various systems in the tunnel in addition to regular maintenance and cleaning.

5 The maiden voyage of Rickmers Jakarta The Marshall Islands-registered multi-purpose general cargo ship, Rickmers Jakarta, made its first call at KaoPort on May 14, 2004, docking at Wharf No.37 to load 5,000 tons of machinery and iron. General Director Huang of KHB welcomed the vessel's arrival by presenting a commemorative plaque. According to its shipping agent, High Speed International Company, Rickmers Jakarta is one of a fleet of German vessels of the same class. Kaohsiung Port became a base of operations in Rickman's global shipping service in 2000, based on the impressive facilities, high operational efficiency, and precise schedule offered by KaoPort. Rickmers has recently deployed an additional nine vessels to meet growing demand. Rickmers Jakarta, with a weight of 23,119 tons and a length of 193 meters, was launched in February this year. It is equipped with two 320-ton booms capable of lifting 640-tons of machinery when used together. Delivery of High Speed Railway Cars The arrival of the first bullet train at Kaohsiung Port marks a milestone in Southern Taiwan's development. The twelve 700T model rail cars were shipped from Kobe on May 19 and arrived on May 23, 2004 on Post-Panama Poseidon Triumph. Loading and unloading took place at Berth No. 74. Guests participating in the welcoming ceremony included Premier Yu of the Executive Yuan, Minister Lin of the Ministry of Transportation and Communications, President Ing of Taiwan High-Speed Rail, Kaohsiung Deputy Mayor Lin, Deputy Ten of KHB, and Director Li of Kaohsiung Customs Office. Due to their bulk, the rail cars assembled to the rear of Berth No. 74 will be delivered in batches to THSRC's maintenance depot in Yenchao, Kaohsiung County.

6 Sitikobe's first voyage to KaoPort The Post-Panamax full container vessel, Sitikobe, made its first call at Kaohsiung Port and berthed at Wharf No. 37 for loading and unloading. She was received by General Director Huang of KHB and presented with a commemorative plaque. Sitikobe is represented by Enterprise Shipping Agency Ltd. Built in May, 2004, it is meters in length, 22.4 meters wide, draws 11 meters of water fully loaded, and can reach a maximum speed of 19 knots. The new 831-TEU container vessel will be deployed in the service between Kaohsuing and Kabira. Kaohsiung fisherman's Wharf Opens in August In order to provide residents with more waterside recreation areas and activities, Kaohsiung Harbor Bureau is enthusiastically promoting The Plan for Expanding Penglai Commercial Port Area In conjunction with the historical warehouse redevelopment, the wharf will not only bear witness to the history of Taiwan's economic development, but also stimulate the harbor's prosperity. The warehouse leased by Da-Ka-Wei Co.Ltd located at Kaohsiung Port Wharf No. 2 will be converted into Fisherman's Wharf and opened to the public by the end of August, Its commercial activities are expected to be both numerous and various, including dining, retailing public displays and entertainment.

7 Together with the Sea-Observation Deck, KaoPort Historical Museum, and Tourist Boat Dock, the newly designed recreation area will foster greater prosperity for the old Yen Cheng Area and bring more business opportunities to the region. APL's high-efficiency loading and unloading American President Line (APL), leasing Wharf No. 68 and No.69 in the third Container Terminal of KaoPort, has reached 164 TEU per hour handling containers of Lapl Jade, which surpassed the performance index set by KHB. APL, one of nine large shipping companies leasing exclusive wharves in KaoPort, has leased two wharves for the use of imports and exports, transshipment, and container storage for the past 25 years. APL indicated that its commitment to improving its operations process and to adapting to changing global trends was responsible for its record-breaking operational efficiency. Representatives of the Port of Tacoma pays a visit Vice Director, Mr. Ted Bottiger and three other representatives the Port of Kaohsiung on April 20, 2004, which was their second visit since signing a sisterhood agreement in The Vice Director and General Director Huang of HKB exchanged views on both ports respective performance, construction, and future development.

8 Representatives of the Port of Dubai call at KaoPort Mr. Hassan Hadi(Container Terminal Operations Director), Mr. Saeed Suhail (Container Terminal Manager), Mr. Ian Brttiger( Senior Technical Manager) from the Port of Dubai, KaoPort's sister port, visited different sites at KaoPort on the morning of May 18, In addition, they called at Yang Ming Group and Yes Logistics in the afternoon. The next day they returned to the United Arab Emirates following a courtesy visit to General Director Huang of KHB. The Port of Dubai - KaoPort's thirteenth sister port - signed a sisterhood agreement in The delegation exchanged views with KHB on expansion of the Port, container operations, container machinery, and aspects of international logistics.