Essential Points of Kaohsiung Free Port Plan Kaohsiung is Taiwan's largest international harbor, serving 372 shipping routes to 367 ports in 102 countries. Its container handling totaled 8,843,000 TEUs in 2003, accounting for 73% of Taiwan's total. Following its opening to private operators on Jan. 1, 1998 the port's cargo loading and unloading costs have dropped and its efficiency has continuously improved. The harbor's Offshore Shipping Center, currently the only one in Taiwan, began providing transshipment services for ships sailing between Taiwan and mainland China in April 1997; from 127,509 TEUs that year, the number of containers handled there soared to 630,337 TEUs last year. Kaohsiung Free Port will have a planned area of 397.69 hectares (see Table 1) and is projected to start operating next January. As the free port continues to provide container-related operations, development will proceed at the wharf 34-35 area, to the rear of the third container center, the land around the elevated interchange at the fourth container center, and the area to the rear of wharf 122 for the expansion of international logistics and other services. The Kaohsiung Harbor Bureau predicts that the free port will integrate with neighboring areas including the multifunction trade park, the economic processing zone, Taiwan Sugar's Kaohsiung logistics park, Kaohsiung International Airport, and inland container yards to produce a multiplier effect. After its inauguration, Kaohsiung Free Port will attract approximastely NT$ 3.45 billion in new investment, provide 500 new jobs, and boost the production value of free port enterprises by about NT$ 1.2 billion. First Taiwan Free Port Set for Summer Inauguration A Mar. 8 meeting of the Executive Yuan's Free Port Coordinating Committee approved applications for the establishment of a free port at Kaohsiung harbor. The applications will be submitted to the Executive Yuan for final approval. The Free Ports Coordinating Committee notes that development of the free ports will now be pursued actively, and that the free ports will begin operating after the Ministry of Transportation and Communications issues their licenses. Operations are projected to begin in Keelung in September this year, and in Kaohsiung in January 2005.Kaohsiung Harbor Bureau estimates that the free ports will attract an initial investment of about NT$ 3.45 billion and generate at least 500 jobs. Companies operating in the zones will add around NT$1.2 billion in annual production value (see Table 2). According to the Coordinating Committee, a number of other agencies have expressed an interest in setting up free ports in response to corporate needs. These include the Economic Processing Zone Administration of the Ministry of Economic Affairs MOEA, which operates seven zones: Nanzih, Kaohsing, Linguang, Taichung, Taichung Harbor, Pingtung, and Douliou, the Civil Aeronautics Administration of the Ministry of Transportation and Communications for its Taoyuan Air Cargo Park, the Taichung Harbor Bureau, Hualien Harbor Bureau, Tainan County Government for the Southern Free Ports, Tainan City Government the Anping Free Ports, Kaohsiung City 1
Government Southern Star Free Ports, and Industrial Development Bureau of the MOEA Changhua Coastal Industrial Park, Mailiao Industrial Harbor, Guantang Industrial Harbor, and Heping CementHarbor at Hualien.The Economic Processing Zone Administration submitted its application on Oct. 15, 2003, and the MOEA is currently collecting opinions on it from the Ministry of Finance and local government. Under the Executive Yuan's plan, free ports will provide four major advantages: single-window administration, the free flow of goods within the free ports, autonomous management by companies operating in the free ports, and the free exercise of commercial activities within the free ports by international business people. The free ports will be viewed as being "within the territory but outside the customs" of the Republic of China. Goods entering a free port will be able to flow freely within that free port and between free ports, and to undergo such operations as warehousing, transshipping, and value-adding. They will be exempt from import tariffs as well as commodity and business taxes, and their customs declaration and clearance procedures will be simplified. In addition to the usual visa or visa-exempt procedures, foreign business people entering the free ports may, via applications filed through the free port administrative agency, apply for visas upon arrival in the ROC. Business people from mainland China, Hong Kong, and Macao will be able to apply, under regulations governing relations between people on the two sides of the Taiwan Strait, to enter the free ports to engage in commercial activities. For the latest information on the progress of free ports in Taiwan, please check this website: www.cedi.cepd.gov.tw Two newly-established logistics areas in KaoPort In response to the national government's global logistics plan and to further boost the business of the logistics center in KaoPort, KHB has set aside two additional areas for logistics use and commenced open bidding in March. The total investment for these two areas, the land to the rear of Berth No. 44/45 and No. 34/35, is estimated to be more than NT $350 million. Following its completion, it is expected to attract those multinational companies interested in running a high value-added logistics warehousing business. Revision to boundary adjacent to No.3 and No.5 terminals KHB has expanded the port area adjacent to the third and the fifth terminals in an attempt to solve the transshipment escorting problem between the two container terminals and incorporate both terminals into a single operational center. Under the terms of the project, some sections of Shing-Sheng Rd and Ya-Tai Rd will also be included in the restructuring of the port. The project will commence following the Executive Yuan's approval. 2
A sixth container terminal for KaoPort Kaoport completed the feasibility study for its sixth container terminal in February, under the National Development Plan. KHB has conducted related work since March 2003, and is expected to complete the bidding process by this October and the selection of the successful applicant by the end of 2005. This project is to develop four container berths on 75 hectares of land with 1,500 meters of quay and a draft of 16 meters in depth. 475 meters of land to the rear of the berths is for use as a container yard. The project will be carried out on a BOT basis between 2006 and 2009. Of the total expected budget of NT$ 14.28 billion, NT$ 2.33 billion will be met by the government. After the government acquires the necessary land, construction by the private sector will commence in 2006. It is estimated the new berths will be able to accommodate 8,000~10,000 TEU containers and its cargo handling will deal with up to 2 million TEU annually. To date, several companies have already committed investment to the project. Draft limitation eased to 14 meters for vessels' passing above cross-harbor tunnel Following discussion between shipping companies, pilots, and KHB, Kaohsiung Harbor Bureau has decided to ease the draft limitation above the cross-harbor tunnel to 14 meters to accommodate the new generation of large container ships. The new limitation is subject to stable tides and skillful piloting. In addition, regular measurement of water depth and dredging work will be necessary to ensure navigation security. KHB also provides online tidal information gathered by academia through newly-installed digital instruments. KHB will evaluate the effectiveness of the half-year trial stage of this new approach in the expectation that it will offer a more advantageous operational environment for carriers. 3
Lien Hai Ltd purchases a new gantry crane Lien Hai Terminal & Steverdoring Co.,Ltd purchased a new gantry crane on March at Wharf No.42 to cope with a growth in business and to facilitate operational efficiency. The new gantry crane with a load capacity of 35.6 tons is able to reach out 13 rows of containers. With four gantry cranes presently in operation, Len Hai is able to shorten vessels' berthing time and thus reinforce its quality of service in the first Container Terminal. Lien Hai Stevedoring Company leased Container Berth No.42 on July 16, 1999, and Berth No.43 on May 1991, due to its growing business. In order to accelerate the clearance process, Lien Hai recently commenced "Autonomous -Management" with KHB's assistance. The requirements for Self-Management include: computer assisted control over goods, applications, and customs operations; newly- designed traffic flow and the installation of closed-circuit televisions. Anping Harbor completes Petrochemical Berth No. 22/23 and its hinterland storage tanks KHB and Chi Mei Storage Co.,Ltd have jointly completed construction of petrochemical Berth NO.22/23 and related storage tanks. The first use of the new berths was on Feb.25, 2004 by Sun Jupiter, which is 112 meters in length and 5,359 tons in weight, carrying 981.096 tons of Methyl Methacrylate, from Thailand Map Ta Phut Port. The two new berths formally commenced operation following the second trial voyage by "Esteva Tera" carrying styrene Moner. The two petrochemical berths (at a total investment of more than NT$600 million by Chi Mei ) are 200 meters in length respectively and 11 meters in depth and possess seven related oil tanks and 4
other auxiliary facilities. KHB allocated three police yachts to pilot the vessel carrying petrochemical products and enforced all relevant safety measures. Completion of Anping Harbor's outer breakwaters and lighthouses The first phase construction of Anping Harbor outer breakwaters and the lighthouses- were completed on Feb.,2004. Anping Harbor's navigation channel - with a draft of -11.5 meters, a width of 180 meters and a diameter of 500 meters for a turning Basin - is capable of berthing vessels up to 20,000 tons. The newly-built North Breakwaters and South Breakwaters are 2,396 meters and 1,235 meters long respectively. There are also two lighthouses. In conjunction with Chi Mei Corporation, Anping Harbor is expected to continue to enjoy great economic success in the future. Recently, KHB held a seminar with the shipping industry on the topic of restrictions applying to vessels entering and leaving Anping Harbor. The final conclusions include: (i) Anping Harbor is able to accommodate 16,500- ton vessels with 20,000 DWT, and a draft of 9.9 meters. (ii) Berth No.'s 1~4 are designed to accommodate a draft of 9 meters, so the draft for vessels docking is limited to those under 8.1 meters. Berth No.'s 22 and No.23, Chi Mei's exclusive berths, are 200 meters in length, and -11 meters in draft, so the draft limit for vessels docking there is 9.9 meters. KaoPort plans new Passenger Terminal In line with the Executive Yuan's plan to "Double the number of Tourists Visiting Taiwan" under its "Challenge 2008 National Development Plan", the MOTC has integrated its "KaoPort Passenger Terminal Construction Project" with the Kaohsiung City Government's plans, such as the Hsiunguang Ferry Terminal, Oceanside Park, and Starlight Boulevard. KaoPort's Passenger 5
Terminal, included in the "Ocean Capital Plan", will be constructed on land to the rear of Berth No. 21, and is designed to take maximum advantage of the sea view. Facilities in the Terminal Building will include an information center, check-in, tickets sales area, customs gate, shops, and restaurants, etc. Work on the Passenger Terminal is slated to commence in 2005; and construction work is expected to be completed by the year 2007. In combination with local tourism resources, this new Passenger Terminal will provide residents with both waterfront space and an additional hub in the sea-and-land sightseeing network. KHB recognised for BOT project KHB received an award for its innovative co-operation with the private sector, in particular the construction of offices and a control station at Berth No. 65/66 on a BTO basis. KHB, in conjunction with OOCL Line (the leaser of Berth No. 65/66 ) completed the construction under a BOT scheme following several coordination meetings and inspections of the site. Director General Huang on behalf of KHB accepted the award from Premier Yu. Continue Growth for Kaoport The strong growth of containerized cargo for the Port of Kaohsiung continued in the first guarter of 2004 compared to 2003. Imports increased by 5.98% compared to last year. Exports increased by 11.59%, Transshipment increased by 8.4% while the total (imports/ exports and Transshipment) increased by 8.52% over the same period last year. The actual TEU figures for first guarter of 2004 were 1,158,012.75TEU for imports, 1,150,792TEU for exports 1,205,942.5TEU for Transshipment and 2,308,804.75TEU for the total. 6
Deutschland's maiden voyage to Kaohsiung Port "Deutschland", registered in Germany and carrying 239 passengers, arrived on her maiden voyage to Kaohsiung Port on Feb.20,2004. All the tourists on board took a one-day tour around Kaohsiung. Deutschland (represented by Barwil Agencies Ltd) has a total tonnage of 22,496 tons, a length of 175.49 meters, and a width of 23 meters. The passengers on Deutschland were said to be impressed with Taiwanese hospitality on this, her first visit to Taiwan. Harbor Master Huang, on behalf of KHB, and several invited guests welcomed her arrival. It is hoped this demonstration of Taiwan's warmth The maiden voyage of "Hanjin Chicago" The "Hanjin Chicago", represented by Shing Hai Shipping Agent, made its maiden voyage to Kaohsiung Port on March 13, docking at Berth No.78. She received a warm welcome from KHB and accepted a commemorative plaque. The "Hanjin Chicago", registered in Liberia, was built in Pusan, South Korea. It has a carrying capacity of 5,700 TEU with a length of 279 meters, a width of 40 meters, a gross tonnage of 65,918 tons and a maximum speed of 26.3 knots. Both the "Hanjin Chicago" and her sister vessel, the "Hanjin Brussels" (whose maiden port of call was Kaohsiung on Feb.13, 2004) are deployed for European service. The "Hanjin Chicago" left for Pusan the same day after loading containers. Representatives of the Port of Vladivostok pay a visit to KaoPort On March 25th, Vladivostok Port's President Mikhai Robkanov together with two Vice Presidents - Vitacheslav Pertsev and Lexander Kononenko - and Marketing Manager Yury Sidorenko, called at KaoPort. Director General Huang of KHB received them in person and gave them a briefing as well as exchanging ideas on port facilities, port management, leasing business and future developments. During a one-hour meeting, Mikhail Robkanov was particularly interested in discussing port management, current operations, cargo handling efficiency, berth leasing charges, etc. They later visited the Port Historical Museum and viewed port facilities by boat. 7
Through the exchange of practical port management ideas resulting from this visit, Mikhail Robkanov said it would certainly boost Vladivostok Port's future development. Seven Seas Voyager makes first call at Kaohsiung Port On Mar.15, 2004, 'Seven Seas Voyager' with more than four hundred passengers arrived at KaoPort from Hong Kong, docking at Berth No.2. Deputy Director Teng, on behalf of KHB, greeted her arrival in a grand manner by presenting commemorative plaques. San Chian Shipping Agent in Taiwan represents the cruise liner which is registered in the Bahamas. She has a gross tonnage of 1,500 tons, a length of 206 meters, and a width of 28.8 meters. Since departing the East Coast of America, she has visited Australia, Singapore, Thailand, Vietnam and Hong Kong, with threequarters of those on board being American passengers. The "Seven Seas Voyager" embarked following a one-day tour of Kaohsiung City The Deputy Director Mr.Ten presented. commemorative plaque asevidence of KHB's warm welcome. Tai Promotion christened and launched Taishin Navigation Company (TNC), a subsidiary of Taiwan Navigation Co, Ltd, ordered a 77,000-ton Panamax bulk carrier from China Shipbuilding Industry Corporation(CSIC). On Feb.9, 2004, the new vessel left for Hong Kong after its christening and delivery ceremony in CSIC's shipyard. 8
The ceremony was jointly presided over by the President of TNC and the President of CSIC, and attended by Director-General Huang of KHB and over 100 guests from the shipping industry. Tai Promotion has over 70% of high tensile steel in its construction, is a sister vessel of Tai Progress (delivered in Jan.2004) and weighs 77,834 tons, is 225 meters in length, 32.26 meters in width, 14.1 meters in depth, and has a cruising speed of 15.4 knots. Lin Ling-Sen, head of the MOTC, accompaniedby Director-General Huang, arrive in Kinmen for an inspection of Shuitou Harbor Mr. and Mrs. Kahanoff, on behalf of the Israel Economic and Cultural Office in Taipei, pay a visit to KHB Winmax Maritime Corp., together with Captain Patrick Gutperle of Sucden, visit KHB 9
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