No security deposit needed from shipping firms of lower credit risk

Waiver from April to benefit 80% of firms using Singapore’s port, improve their cash flow

- Ovais Subhani

Shipping companies deemed unlikely to default on their dues will not need to furnish a security deposit or banker's guarantee to Singapore's port authority from April 1, said Acting Minister for Transport Chee Hong Tat on Jan 12.

Currently, the Maritime and Port Authority of Singapore (MPA) requires ocean-going vessels calling at Singapore's port that are billed more than $5,000 annually to furnish a security deposit or banker's guarantee.

This insures MPA against the risk of default by shipping companies on their port services dues.

However, the MPA's new practice - based on credit-risk profile will likely benefit 80 per cent of shipping companies that have been using the port, and improve their cash flow by more than US$20 million (S$26.6 million) a year, Mr Chee said at the Singapore Maritime Foundation (SMF) New Year Conversations 2024 event at the Pan Pacific Singapore hotel.

"This will help all our maritime companies, including small and medium enterprises," the minister said.