PUTRAJAYA: Johor Port Authority (JPA) has entered into an agreement with a private company, Smart Crest Sdn Bhd, to develop a RM2 billion Bunker Island, near Tanjung Bin in Johor.
Transport Minister Anthony Loke Siew Fook who witnessed the signing of the agreement today, said the project, fully funded by the private sector will put Malaysia, and particularly Johor, on the world map as a major player in the oil storage and bunker business.
“At the national level, the development of this island will be a significant economic multiplier for the country as ships that enter to discharge or load oil will spend on other services such as agency fees, port charges and deliveries to the ship and crew transfers, hotels, career development and trade finance,” he said.
The project according to Loke, will create a centre for oil break bulking, make bulking, blending and redistribution to both domestic and regional market.
The agreement was signed by JPA chairman Rosnan Fathlal and Smart Crest managing director Ir Cher Lee Kiat.
Located within the Free Commercial Zone of Tanjung Pelepas, Bunker Island will sit on 100 acres of the reclaimed island at Tanjung Bin.
The development of Bunker Island will take four years to complete. It will have 61 tanks located in five tank pits, a storage capacity of about 1.2 million cubic metres, two jetties and seven berths, besides capabilities to handle various types of products.
Loke said the project will also provide Malaysia with an excellent opportunity to promote cleaner marine fuel in accordance with International Maritim Organisation regulations, effective January next year.
Speaking to the media later, Loke said his ministry will ensure that the long-delayed Bunker Island project starts as soon as possible by making sure that no red tape hinders the implementation of the high impact project.
“The developers are confident that the first phase of the project, which is the oil tank development, can be completed within two years, thus generating revenue for the next phase of development,” he said.
Rosnan said JPA handed a 30-year lease period to the developers with a rent of RM500,000 a year for the first two years. Subsequently, a lease payment of RM2.19 million a year will be imposed for the third, fourth and fifth years and a 10% increase in rent once every five years.