The Story of of Singapore’S Strategic Position As a Prime Node in the Global Shipping Routes
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BIBLIOASIA JUL - SEP 2019 VOL. 15 ISSUE 02 FEATURE Dr Wee Beng Geok is a former Associate Professor of Strategy and Management at Nanyang Techno- logical University. In 2000, she set up the Asian Busi- ness Case Centre, Nanyang Business School, and was its director for 15 years. She has also worked in the corporate sector, including more than a decade in Singapore’s marine industry. Singapore has always been highly prized for its location. Fortuitously positioned at the southern tip of the Malay Peninsula, at a key crossroad along the East-West trade sroute, its importance as a port settlement can be traced to the 14th century when the island was known as Temasek. In 1819, the British arrived on the scene, and were quick to grasp Singapore’s potential as an entrepôt and a base to (Facing page top) A large crude carrier at Sembawang Shipyard’s new Premier Dock, a $50-million, 400,000- spread its version of merchant capitalism dwt drydock, at its official opening by then Prime Minister Lee Kuan Yew in May 1975. Ministry of Information in Southeast Asia. Land was leased from the and the Arts Collection, courtesy of National Archives of Singapore. indigenous rulers to set up a British trading (Facing page bottom) Albert Dock was built by the Tanjong Pagar Dock Company in Tanjong Pagar in 1879. post on the island, and in a treaty signed in It was located to the east of Victoria Dock, the company’s first drydock which began operations in 1868. 1824, Singapore was ceded in full to Britain. Lim Kheng Chye Collection, courtesy of National Archives of Singapore. For the next 140 years, the British built insti- (Above) Rows of lighter boats at Boat Quay, 1890. These lighters transported coal from the coal-carrying tutions that would lay the foundations for ships anchored at the mouth of the Singapore River to be stored in godowns along the river banks. When the rise of a modern global city, including a the steamships arrived for refuelling, lighters would transport the coal out to the steamships. Courtesy of National Museum of Singapore, National Heritage Board. market infrastructure that took advantage The Story of of Singapore’s strategic position as a prime node in the global shipping routes. turn transported the coal to warehouses and several companies were willing to Two dockyard entities from the situated along the river bank for storage. take the risk. colonial period became precursors of Lighters then transported the coal out to well-known post-independence companies: the arriving steamships. It was a laborious Competition, Monopoly and a Keppel Shipyard and Sembawang Shipyard. process, made all the worse during stormy Government Takeover Two Shipyards Although the origins and legacies of these weather and choppy seas when the light- New Harbour was deemed a suitable two shipyards could not be more different, ers would sometimes capsize, resulting location for drydocking facilities. In 1859, Keppel & Sembawang their trajectories were shaped by the in tons of lost coal. Furthermore, stored British mariner Captain William Cloughton imperatives of the British Empire as well damp coal combusted easily and became built Singapore’s first drydock, aptly as an industrialising Britain that was at a constant fire hazard. named Dock No. 1, at New Harbour. Keppel and Sembawang shipyards are major players in Singapore’s maritime and shipping the forefront of major technological and In 1845, the Peninsular and Oriental The Patent Slip and Dock Company was industry. Wee Beng Geok traces the colonial origins of these two companies. business innovations. One shipyard had Steam Navigation Company (P&O) in subsequently formed in 1861 to assume purely commercial roots, while the other London began monthly sailings to the Far control of this ship repair facility. was a military naval base established to East, including a stop in Singapore. In 1852, In 1864, a group of investors decided protect British imperial interests in Asia. P&O became the first shipping company to build another drydock at New Harbour. to move its coaling stations from the Sin- To raise funds for the project, they set Early Dockyard Entrepreneurs gapore River to New Harbour (now Keppel up a joint-stock limited liability company The advent of steamships for sea transpor- Harbour3) where it built its own wharf. The – Tanjong Pagar Dock Company Limited tation in the 19th century drew entrepre- new location had a sheltered anchorage, (TPDC) – which became the first local neurs to invest in the ship repair business a pier for bunkering, as well as space for joint-stock company to offer shares to in Singapore. Although steamships were coal storage and godowns (warehouses). the public in Singapore. faster and more reliable compared with Other shipping firms followed suit and The TPDC initially hoped to raise wind-powered vessels, repairs to the New Harbour, with its deep waters, soon $200,000 in Singapore, with 2,000 shares of steamship hull – unlike sailing vessels – became the preferred berthing location $100 each available for purchase. However, could not be done by beaching the vessel1 for ships calling at Singapore. as not all shares were taken up by local but had to be carried out in a drydock.2 With increased steamship traffic, residents, the balance was sold to investors The use of steamships also required several Singapore-based British and Euro- in London. With a reasonably attractive divi- new logistical arrangements. Coal, the pean companies as well as residents dend policy, TPDC shares were considered energy source of steamships, had to be became keen to invest in the construc- a good investment by the 1870s. In subse- first transferred from coal-carrying ships tion of drydocks for ship repair. Although quent fundraising exercises, new shares anchored at the mouth of the Singa- considerable start-up capital was needed, were offered for sale at a premium, with pore River onto small lighters, which in the returns were projected to be good some bought by shareholders in London. 24 25 BIBLIOASIA JUL - SEP 2019 VOL. 15 ISSUE 02 FEATURE Victoria Dock, TPDC’s first drydock facilities became increasingly inadequate The SHB retained TPDC’s monopolistic (Left) When completed in 1938, King George VI Dock located on the western side of Tanjong to compete internationally and the com- ship repair business, and for the next five at the Singapore Naval Base in Sembawang was touted Pagar, started operations in 1868. With pany’s wharf system was under severe decades, it controlled the entire chain of as one of the largest naval docks ever built and capable the opening of this new dock, the Patent strain as no major improvements to its repair business at Keppel Harbour. With of accommodating the biggest ship in the world. The Singapore Free Press and Mercantile Advertiser, 14 Slip and Dock Company faced intense facilities had been carried out since 1885. its sizeable facilities, the SHB soon edged February 1938, p. 1. competition. It mounted a price war, This situation was exacerbated by out the smaller shipyards and engineering and TPDC was forced to cut its prices. differences with regard to capital spend- workshops in Tanjong Rhu and Kallang. (Below left) King George VI Dock under construction at the Singapore Naval Base, 1933. The National Although TPDC’s drydock business ing between the TPDC Board in Singapore This commanding position lulled the Archives of the UK (ADM195/106). faced losses as a result of this move, its and the London Consulting Committee in SHB to such complacency that by the wharf services still managed to turn in a Britain representing the company’s group end of the 1950s, capital investment had profit and became the company’s main of European and British shareholders.4 slowed down considerably and SHB’s costs prospect of a war with Japan, the income source. In March 1904, TPDC submitted and productivity began lagging behind completion of Sembawang Naval Base With the opening of the Suez Canal a $12-million modernisation plan to overseas dockyards like Hong Kong’s. became a priority for Britain. King George in 1869, more steamships called at Sin- upgrade and expand its facilities, including VI Dock was finally completed in early 1938 gapore and, by the following year, dock a proposed financing scheme. This was A New Naval Base in Asia and was touted as one of the largest naval operations had become profitable. In rejected by the company’s Europe-based After World War I, as the locus of naval docks ever built, capable of accommodating 1870, Patent built its second dock, Dock shareholders, who were concerned that power moved to the Pacific, the Board the biggest ship in the world. No. 2, at New Harbour. Nine years later, in the costs of financing the project would of Admiralty in London, as part of its ap- 1879, TPDC built another drydock, Albert “endanger a dividend of 12 per cent”.5 praisal of British naval policy, proposed The War Comes to Singapore Dock, located to the east of Victoria Dock, TPDC sought financial support from building a new naval base facility in Asia. In December 1941, as Japanese imperial to meet the growing demand. The TPDC the Straits Settlements government, In the light of the growing threat posed forces advanced into Singapore from Ma- began to acquire smaller rivals that owned but instead the government decided to by the Japanese military and rising inter- laya, Sembawang Naval Base came under docks and wharves at New Harbour, but expropriate the company’s assets and take national tensions, Britain grew anxious to heavy Japanese shell and mortar attack. who were less able to withstand the com- over the management of its operations.