Warisan: Cabotage scrapping pointless if licenses still needed

The lifting of the cabotage policy for Sabah and Sarawak would be pointless if international shippers still need to obtain domestic shipping license to send their goods directly to the ports in the two Borneo states, said Parti Warisan Sabah.

Prime Minister Najib Abdul Razak yesterday announced the scrapping of the policy, which has been blamed for higher cost of goods in East Malaysia, starting June 1.

Warisan vice-president Junz Wong said the policy cannot simply be scrapped without legislative change as Section 65 of Marine Shipping Ordinance 1952 requires all vessels engaging in local shipping to obtain a domestic license.

"Isn't it too much a fairy tale when Najib announced that it would be effectively applicable and practically workable on the ground on June 1 without amendment of any laws?" the Likas assemblyperson asked.

Under the cabotage policy, all domestic transportion of goods in Malaysia must be done by Malaysian vessels, and as such all goods would arrive via Port Klang.

While it has long been blamed increasing the retail price of goods in the East Malaysian states, the Transport Ministry said a World Bank study on national port strategy high costs of goods is due to poor land connectivity, high handling charges and weak distribution channels.

"Without removing the policy of domestic shipping license, it will be the same as under cabotage policy where shippers won't be able to send goods to Sabah ports as they don't possess domestic shipping licenses," he said.

As such, he said, Sunday's announcement was a mere ploy to boost support in the lead up of possible Sabah snap polls.

Wong said even if licenses are easily obtained, ports in East Malaysia do not have the same capacity as the Klang and Tanjung Pelepas ports in the peninsular, which have received much federal funding to compete in the region.

"If Najib is serious about making Sabah port the main port for this region, he should allocate a few more billions for Sabah to upgrade our Sepanggar Port.

"A mere RM1 billion to increase the handling capacity of up to one million twenty-foot equivalent units (TEUs) is only a small regional port not a main port.

"Najib should upgrade our port to a capacity of handling at least three to four million TEUs if he is serious about realising the abolition of cabotage as well as the Sabah Port future development," he said.

Port Klang handled 13.7 million TEUs of containers in 2016.- Mkini