Building a port in Malaysia?

Someone posted a question through the comment section and the question is "How would one go about and build a port in Malaysia?"

When I got this question today, I actually have not even finished with the post introducing who I am to the world. However, let me break the monotony and answer this question with a few pointers first. This question can never be answered in total as it depends on the purpose of building the port.

The person who send in this question is lucky as I did have some experience with a few clients who were operating some kind of ports in the state of Selangor a few years ago. As you might know, the 'official' ports in Selangor is in Klang, hence even the name of one of the county in Klang is Port Klang. There are a few port in Klang, which is named depending on their location such as West Port, North Port, you get the idea.

In the cases of my clients, they owned ports for barges to dock and unload their cargo. Some of these barges come from Sumatra on their own and some are the type of barges which operate between ships, which cannot dock near shores due to their sizes. There are also barges which send cargo to and fro from West Malaysia to East Malaysia. Their ports are not as big as the one in Port Klang but the procedure for them to set up their port is the same.

The first thing that they need to do is to apply for temporary occupation license (TOL) for the pieces of lands which is considered as the riverbanks or which separate the lands and the sea. I have trouble explaining these areas as I am not sure what is the correct term for them. In the National Land Code, no one can own beach around Malaysia. This include the part of the land between your own land and the sea or the river. They are considered as river reserve and they are govern by the land office within the area.

You need to apply for these lands through the form reserve for Temporary Occupation License and pay the premium for them once it is approve. You need to state the reason for your application and it will only be approved if the current administration allow you to get a license for a port, which is a different application altogether, to a different department. At the time which I was involved with my clients, there was an embargo for the license for any port which does barter trading (apparently barter trading is still big in most ports of the world and is big business). The TOL has to be paid yearly. It will also be prudent for you to own the land adjacent to the TOL land as you may need space for your cargo to be stored (like what my client did) or at least rent the land.

In the case of Selangor, the final authority in granting a license for a new port is the Economic Planning Unit for Selangor or Unit Perancang Ekonomi Negeri Selangor. They are the one which can approve your license and decide whether it will be beneficial for the state of Selangor to grant another license for another port within Selangor. The approval is not going to come from them but from the State Executive Councilors (which is the Cabinet of the state government) but the paperwork and recommendation will come from them. They would also require you to get recommendation from the Land Office where the port is supposed to be. I think the place for the port needs to be within an area designated by the state government but as long as there is no objection from adjacent lands.

In certain cases, if the place where the proposed port may effect the environment within an area, an Environmental Impact Assessment (EIA) report maybe required and for this you have to go through the Department of Environment of the particular state where you intend to operate.

That is basically how you build a port in Malaysia, through legal means. To summarise :

1) Buy the lands or rent the lands adjacent to the proposed site;
2) Apply for Temporary Application License for the lands beside the riverbanks or sea from the Land Office;
3) Apply for the license to operate a port from the Economic Planning Unit;
4) No. (2) and (3) usually goes hand in hand and one needs the recommendation of one for the other;
5) EIA maybe required by the DOE if the operation of the port expect to affect the environment within the area.

1 comment:

adahlan said...

Thanks Kruel. But I think your analysis is missing an essential ingredient: the approval from the Ministry of Transport ("MOT").

Maritime matters are governed by MOT and I do believe that in the interest of safety of ships docking in and out of the port, the MOT would definitely would want to regulate the navigational aspects. Do let me know if you were able to circumvent such requirement.

Secondly, is it true that the State EPU has the final say over port operations? From my research, I found from our Constitution that the port matters are under the purview of the Federal Government.