A new player is now managing facilities at Papua New Guinea’s two major ports—Lae and Motukea Island—and it is aiming high. Business Advantage PNG meets Ted Muttiah, Director, Asia-Pacific, for ICTSI South Pacific, who has a concrete suggestion on how PNG’s ports can help improve the country’s foreign exchange situation.

Motukea Island, the location of Port Moresby’s new port. Credit: BAI

International Container Terminal Services (ICTSI) has been awarded 25-year concessions to manage the international arms of new facilities on Motukea Island near Port Moresby, and in the Lae Tidal Basin.

‘All international container and general purpose vessels cargo into and out of Motukea and Lae respectively will go through ICTSI South Pacific terminals,’ he tells  Business Advantage PNG.

‘It is our vision at ICTSI South Pacific to establish Lae Tidal Basin and Motukea as strategic international maritime gateways to/from the South Pacific.’

ICTSI is located in 18 countries and operates 30 terminals. Muttiah believes the company’s ‘DNA’ is suited to operating in countries like PNG.

‘We do exceptionally well in the emerging markets, as reflected by the company’s stevedoring portfolio.’

Ship to shore

ICTSI’s Ted Muttiah. Source: BAI

Muttiah says he is looking for a significant jump in efficiency. ‘Today, vessel crane productivity in PNG is achieving about 10 to 12 moves per hour. The global standard is above 30 moves per hour.

‘So, the aim is to lift quayside productivity as a key element to improving operational costs within the supply chain for port users.

‘Expectations are high.’

‘I acknowledge the work that has been done by existing stevedores in serving the port’s needs of the day. The challenge now is to take port efficiency to a higher level. We need to focus on global benchmarks within the context of developing local capabilities and expertise.

‘It is our vision at ICTSI South Pacific to establish Lae Tidal Basin and Motukea as strategic international maritime gateways to/from the South Pacific. A PNG terminal is the most efficient in Oceania. Showcase PNG’s maritime capabilities on the global stage. Now that is something to get excited about, isn’t it?’ he enthuses.

Expectations

Muttiah says his first requirement is to start up the operations and then consolidate them.

‘Expectations are high. We need to have a consistent operation, predictable and sustainable,’ he tells Business Advantage PNG. ‘So that shipping lines, as our customers, know that when their ships can berth on arrival and be handled at an optimum port dwell time.’

Muttiah says he will aim at continuous improvement. The increased scale will lead to higher productivity, and afford the ability to handle more ships by reducing ship turnaround time at the berth.

There is a mandated tariff. ‘We have to work within the parameters of those governed regulations—the bid is the bid and we’ve got to make it work. Operationally, the first six months will be challenging. ‘The business plan itself is pretty much set, it’s just getting the best use of it now.’

Skills

Muttiah says getting the right skills represents a challenge. He notes there was ‘a lot of misinformation’ about this, which the company could not correct because of a confidentiality agreement at that time.

‘The mobile harbour cranes in PoM and Lae are relatively new considering the working hours as they have not been in active deployment for the last seven or so years. It is a requirement of the concession that these assets be utilised. So there is a need to ensure we have experienced operators for this equipment to deliver high-performance outcomes.’

‘Efficiency is not a one-time transaction.’

‘We will support local talent with training and upskilling. We expect training to be conducted on the ground by trainers and super users from ICTSI and by taking local talent to our flagship operation in Manila where we have similar equipment and simulator training capabilities.’

‘The objective is to get the job done for our customers during the transition and at the same time rotate local colleagues at our flagship operation in Manila to do high performance training as required.’

‘Efficiency is not a one-time transaction. It is the product of landside process discipline that allow quayside efficiency. We need to have the yard operation, the intra-terminal trucking, road delivery and receival, all working in a streamlined manner in support of the quayside operation.

‘Simply driving the crane as fast as you can does not deliver the outcome. The core components of the upstream and downstream supply chain need to be aligned to the objective of quayside efficiency.’

Foreign exchange

Muttiah believes changing the currency rules for stevedoring can be of benefit to PNG. Currently, port fees are charged in kina.

‘In my experience, collection of stevedoring revenue in US dollars is common practice. Stevedoring is seen as an international transaction.

‘We do exceptionally well in the emerging markets.’

‘International vessel operators I believe consider this as a consistent global trading standard. It certainly makes sense to leverage sovereign infrastructure engaged in international trade to derive US dollars in support of a country’s import trade needs. It is an area where the country can earn regular foreign exchange and diminish the apparent foreign currency challenges.