Hiccup in Singapore-Brunei Ties? Part 2

Singapore port operator PSA International's premature termination of its management contract of the Muara Container Terminal in Brunei seems to have created some rumblings in the neighbouring country.

Singapore's Today newspaper, which cited The Borneo Bulletin and other sources, today highlighted unhappiness among some Brunei port workers. This came shortly after PSA's decision to return Muara to the local government on Jan 24. The termination of the contract itself was rather unusual as the two countries enjoy very close political and economic ties as mentioned earlier.

Something unusual is definitely brewing in the sultanate.

Brunei port workers worried
PSA's premature exit shocks transport sector; workers fear job loss
Monday • February 5, 2007

EVEN as PSA International makes its foray into the emerging market of Vietnam, its premature exit from Brunei — where it recently cut short a 25-year deal after just six years — has sparked worries among port workers there.

Rumbles of unhappiness and confusion were heard shortly after PSA said it would hand back the running of the container port — Muara Container Terminal — to the Brunei government this April.

The Borneo Bulletin, which reportedly received calls from the terminal's workers who were worried about job losses, said the surprise move "stumped the transport sector".

"The news came as a shock to me. I didn't hear it from the company but saw it reported in a newspaper," said a worker speaking on the condition of anonymity.

There was little insight into why the relationship was cut short — at least from the Brunei side.

PSA had maintained that it has transferred operational knowledge and expertise to the Brunei Ports Department over the past six years. It has also trained port managers and workers to operate the terminal efficiently.

On Saturday, The Borneo Bulletin again lambasted the Brunei government for lack of transparency in the whole affair, saying it owes the 52 locals and 40 foreign staff an explanation.

"Can Brunei do it alone in the face of stiff worldwide competition? Is the Brunei Port Authority better than PSA, which is a world class operator?" the periodical asked.

The deal was estimated to be worth $100 million by industry sources and was the first major privatisation project by the Brunei government.

But it may not be the end game for PSA, which operates 20 ports in 11 countries, in the sultanate.

In its earlier statement, it said it looks forward to participating in future terminal operating opportunities that may be available once the longer-term vision of the Muara Port is firmed up.

When contacted by Today, a spokesperson from the Brunei Economic Development Board (BEDB) said it was in the final stages of discussions on this second terminal. Further details will be announced in the second quarter of this year.

"Whatever the structure of Pulau Muara Besar, we will engage companies in an open tender. What happens with Muara Container Terminal and the PSA will not have any impact on BEDB's decision to develop Pulau Muara Besar, which will be focused on export-based activities in various key areas. These may include the export of halal products as well as oil and gas," he said.