First, let me welcome you to the presentation ceremony of cheques to the three local universities for the establishment of the MPA Professorships. This is one of the initiatives under the Maritime Cluster Fund, which I announced a year ago.

The maritime sector is an important part of the Singapore economy. It contributes about 6% of our Gross Domestic Product, or about $9 billion. Therefore, developing Singapore into an International Maritime Centre (IMC) is an important cornerstone of our sea transport policies. We are committed to growing Singapore�s maritime and port business, by leveraging on our existing strengths as a regional transportation hub to acquire new capabilities.

There are four key strategies to develop Singapore as an International Maritime Center. First, we must remain cost competitive and safeguard our excellence as a hub port. We need to refine our port policies and infrastructure, to meet the changing needs of the shipping industry.

Second, we need to attract global maritime players to locate their regional headquarters in Singapore. Various schemes have been implemented to achieve this - the Approved International Shipping Enterprise Scheme to attract ship operators and the Approved Freight and Logistics Enterprise Scheme to further develop our logistics sector, by strengthening our supply chain management capabilities and expertise.

However, having the schemes are not enough. We need to continuously review and revise them so that they remain relevant, including in the area of tax incentives. And we have done just that.

I am glad to announce that the Approved International Shipping Enterprise Scheme has recently been enhanced to expand the list of �qualifying ships' and to lift the manpower requirement for operators of Floating Production Storage Offloading vessels and Floating Storage Offloading vessels. These enhancements have made the scheme more attractive and we hope to attract even more shipping firms to use Singapore as the base for their regional shipping activities. In fact, since the inception of the AIS scheme, 50 shipowners cum operators have based their regional operations in Singapore.

We are also actively promoting and encouraging more ship financing activities in Singapore. As an example, the Monetary Authority of Singapore (MAS) has included onshore ship financing activities under the Financial Sector Incentive Scheme. As a result, income derived by ship financing banks from foreign currency loans used for onshore ship financing activities will now enjoy the same concessionary tax treatment as income derived from similar offshore foreign currency loans. This harmonisation of tax rates between onshore and offshore ship financing activities will definitely provide a tremendous boost to the development of ship financing activities in Singapore.

The third thrust of our IMC strategy is to enlarge our local pool of highly trained and experienced maritime professionals to strengthen our transport, logistics and supply chain management capabilities. According to the 2000 Population Census by the Department of Statistics, over 60% of the workforce in the maritime industry are below the age of 39. Despite this relatively young age profile, less than 10% had university education. There is therefore much that we can do to upgrade the quality of our maritime workforce. Today�s cheque presentation ceremony for the establishment of the four Professorship programmes is therefore timely.

The setting up of the four Professorships in Maritime Law, Shipping Economics, Shipping Management and Maritime Business Economics in our three local universities - the National University of Singapore (NUS), the Nanyang Technological University (NTU) and the Singapore Management University (SMU) - is a milestone in the development for Singapore�s maritime industry. It will kick-start the development of teaching and research capabilities for the maritime fields, and make available new training programmes and courses for high value-added and knowledge-based maritime services such as maritime law, shipping management, and marine insurance. Such training programme and courses will need to be specially tailored to have strong industry relevance. It will also mean greater opportunities for our local maritime personnel to share and learn from international academic experts in such areas, thereby enhancing Singapore's development as an IMC.

To develop Singapore into an IMC also requires a holistic manpower training framework for the maritime industry. In this respect, the MPA, in collaboration with the Ministry of Manpower (MOM), will commission a maritime manpower consultancy study this year to gather detailed information on the profile of the maritime workforce. This will allow us to create more targeted training and skills upgrading courses and programs for the industry.

Indeed, a highly skilled quality maritime workforce is one of the key pillars to ensure our continued growth as a leading International Maritime Centre. Nevertheless, one pillar is not enough. We will need to develop new pillars - such as maritime R&D, and maritime arbitration - and strengthen existing ones - such as our taxation policies, so that our maritime business environment can be as conducive as possible.

This brings me to the fourth thrust in our IMC development strategy. We need to speed up the development of supporting maritime services such as maritime finance, insurance and legal services. Among other things, we want to position Singapore as the base for international maritime organizations to conduct their regional activities here. Through this, we can create a vibrant maritime cluster in Singapore.

The port and shipping business is fast changing. To face up to the competition, we must ensure that our port remains relevant to the needs of the shipping lines. The setting up of the Professorship programme, the commissioning of the maritime manpower consultancy study and the review of our taxation polices relating to shipping are therefore timely initiatives, and are in line with our strategies to develop Singapore into an International Maritime Centre.

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