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Troubled waters at Singapore's port

PSA Corp, vying with Hong Kong to be the world's busiest container terminal port, needs to cut charges and revamp operations to keep customers after losing another shipping company to a Malaysian rival, analysts said.

The state-owned operator, which is planning an initial share sale, should consider reducing rates, selling stakes to shipping companies and revamping its berthing arrangements to remain competitive, the analysts said.

"If Singapore wants to stay on the map, the government will have to put on its thinking cap," said Alan Greene, a fixed-income analyst at Barclays Capital. "The honeymoon is over."

Taiwan's Evergreen Marine Corp (長榮海運), a unit of the world's no. 2 shipping line, said it would move to nearby Port of Tanjung Pelepas when its contract expires in August. PSA earlier lost its biggest customer, Maersk Sealand, to its Malaysian rival and risks losing more, making any share sale more difficult, analysts said.

Kawasaki Kisen Kaisha Ltd yesterday said it wouldn't make a long-term commitment to PSA, and analysts said more desertions may follow.
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