Cabotage restrictions had been relaxed effective June 2009

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KOTA KINABALU: The liberalisation of cabotage regulations for the transshipment of cargo highlights the Malaysian government’s commitment in transforming Sepanggar Port into a full-fledged Transshipment Hub of the Far East, said Barisan Nasional (BN) lawmakers yesterday.
Deputy Chief Minister, Tan Sri Joseph Pairin Kitingan said the long-debated cabotage restrictions have already been relaxed effective June 2009, allowing foreign-registered vessels to import and export freely to and from Sepanggar Port without requiring any domestic shipping license.
“As a result, ships from anywhere in the world are permitted to enter Sabah directly, however the only major problem is the lack of cargo volume to justify their transportation cost which makes it less cost effective for foreign vessels to travel to Sabah,” he said in his reply to Sri Tanjong Assemblyman, Chan Foong Hin.
During the State Legislative Assembly (DUN) sitting yesterday, Pairin pointed out liberalisation resulting from federal and state cooperation is already in effect as international cruise liners such as the Queen Elizabeth and Superstar Aquarius can be seen docking at Kota Kinabalu Port.
Pairin, who is also the Minister of Infrastructure Development said the State Government is working closely with the Sabah Ports Authority to transform the Sepanggar Bay Container Port (SBCP) into a major Transshipment Hub of the East which would handle nearly 70 per cent of the total container ship operation throughout the state by 2030.
“The development of the Sepanggar Bay Container Port comes due to the need to balance the total amount of unstable import volume which stands at just 20 per cent compared to 80 per cent in exports,” he said.
The imbalance is contributing to the high shipping cost of transporting goods to Sabah.
“Clearly, higher shipping cost contributed much to the rising cost of living and cost of doing business in Sabah,” he added.
Leading the initiative, Pairin said the Sabah Ports Authority has recently submitted a proposal under the 11th Malaysia Plan for a major developmental project totaling RM1.5 billion aimed at upgrading and modernising Sepanggar Port facilities and infrastructure.
The project is expected to increase the number of exports and stabilise the total volume of import and exports for the state.
On another development, Pairin said the state government has undertaken early steps to improve facilities and infrastructure at Sepanggar Port currently implemented by the Sabah Ports Authority.
“We are working closely with the port authority to initiate dredging activities to deepen navigable waterways to a further 15 metres to allow bigger ships to dock at Sepanggar Port and increase the number of cargo handling machinery equipment such as cranes, rubber-tyred gantry trains (RTG) and others,” he said.
Among others, the port capacity would be increased by expanding the container landing zone by 2.8 acres to handle to handle 500,000 Twenty-Foot Equivalent Units (TEUs) yearly, while the number of docks will be increased by as much as 1 km to accommodate the management of cargo containers as much as 1.25 TEUs.
The Port Authority is also carrying out a detailed study on strategic markets and attracting main liner operators MLOs to Sepanggar Port.
Pairin said the state government is also working closely with the Kota Kinabalu Industrial Park (KKIP) to develop a free trade zone that will attract more foreign investors to open factories in Sabah and contribute to import and export trade.
There are also plans to cooperate with government agencies to enhance Sabah’s infrastructure network and logistics to improve the supply chain operation and make it easier for port users to transport their containers to destinations systematically.
Apart from Sepanggar, Pairin said other Sabah ports would be upgraded to improve maritime connectivity and domestic trade.
One such port is in Sandakan Ports which is expected to be completed within three years.
Major dredging work and upgrading of Tawau Port is expected to be completed this year and plans are afoot to implement an internal comprehensive training programme for port managers.
There will also be a project to develop and upgrade Information Technology (IT) support equipment such as the Terminal Operating System (TOS) which will be completed within 12 months.
In his speech, Pairin also stated that the cabotage policy had been misunderstood, noting that it was initially established to protect the country’s domestic and coastal shipping industries.
Echoing his call, Deputy Chief Minister cum Minister of Industrial Development, Datuk Raymond Tan Shu Kiah reiterated the liberalisation of the cabotage policy had allowed foreign vessels to carry containerised transshipped goods between ports in the peninsular and east Malaysia directly.
“The question of cabotage is resolved and the state government is now taking action and focusing efforts to realise the vision of making Sepanggar Port into a Transshipment Hub for the Far East, “he added.
Credit to Sabah Time Online