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Malaysia Freight Transport Report Q1 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: November 2007 Product Code: R302-1506 Description Malaysia Mining Corporation (MMC), a diversified infrastructure and energy group, in September2007, signed an agreement with the government of Dubai to build a major port in Malaysia’s southern state of Johor. Under the terms of the agreement MMC and port operator Dubai World would develop a MYR16bn (US$4.7bn) maritime centre, including an oil terminal, drydocks, a shipyard and cargo handling facilities. MMC said that the project would bring Dubai World’s expertise and experience to the development of South Johor’s hinterland, unlocking the potential of the company’s 2,255 acres of land at Tanjung Bin. Work on the project was expected to start before the end of 2007, with completion in the second half of 2010. Analysts said that, when completed, the maritime centre was likely to compete head on with the port of Singapore. Malaysian businessman Syed Mokhtar Al-Bukhary controls MMC. Dubai World is controlled by the government of Dubai. Trade and investment flows between Malaysia and the Gulf countries has been increasing recently. BMI sees the net effect on our Malaysian shipping forecast as being positive. Our newly released Malaysia Freight Transport Report concludes that in terms of freight carried, shipping traffic will grow by an average 7.1% per year in 2007-2011. The total number of containers handled at Malaysia’s ports will grow more strongly at 10.9% per year. Despite the mixed outlook for freight rates, the continuing export drive and the dynamism of China and other regional trading partners will underpin strong demand. We now expect total freight carried, measured in million tonnes-km (mntkm), to grow by an annual average of 7.0% over the 2007-2011 period. Total road freight turnover is expected to grow at an average annual rate of 6.6% in 2007-2011. The cross-Malaysia railway link project is being revived, but will not become operational until after 2011. We expect rail freight traffic to perform reasonably well, with annual growth averaging 6.5%. Air freight will grow by a strong 8.6% per annum, with pipeline throughput not far behind at 6.8%. Malaysia scores reasonably well on our overall freight industry business environment ranking. The total score of 43.0 out of a theoretical maximum of 70.0 places it close to the average for the regional peer group (44.7). It is at the top end of the spectrum in terms of expected freight transport growth and scores well as far as long-term economic risk, transport infrastructure growth and the regulatory and competitive environments are concerned. For the 2007-2011 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole by a small margin. It will achieve average annual growth of 5.6%, versus 5.4% for overall GDP. The total value of the transport and communications sector will rise to US$18.9bn in nominal terms by 2011, representing 7.4% of Malaysia’s GDP. Table of Contents
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