WHAT THE INDUSTRIES IN SABAH WANT IS FOR INTERNATIONAL CARRIERS AND SHIPPING LINES TO BE ALLOWED TO BRING IMPORTED GOODS DIRECTLY INTO THE STATE

Impact analysis on liberalisation from cabotage proposed

KOTA KINABALU Oct 26, 2011: An impact analysis on the partial liberalisation of the cabotage policy affecting operational costs in Sabah and Sarawak needs to be carried out, according to Industrial Development Minister Datuk Raymond Tan Shu Kiah.

“We need to know, from the point that certain ports like Kuching, Bintulu and Kota Kinabalu were liberalised from the cabotage policy what impact it has, how much it affects the cost of operation within these areas before we can say that the high cost of goods is because of cabotage.

“We have to say that even after the action was taken by the government to liberalise, only then will we become very clear of the impact it has on the investors, if the cost is rising and it comes very quickly then it is because of cabotage,” Tan said.

Speaking to reporters after officiating the Sabah Domestic Investment Seminar here yesterday on behalf of Chief Minister Datuk Seri Musa Haji Aman, Tan stressed that there were many related issues contributing to the escalating operational costs in Sabah.

He was replying to a question on the cabotage policy which has been attributed by many as the reason for the high cost of goods in Sabah.

“The question here is, is it really because of cabotage?” he said, stressing that the policy had been addressed by the federal government resulting in the partial liberalisation of important areas connecting to Sabah and Sarawak.

“As far as KK is concerned, Sepanggar Port has been opened and is not tied to cabotage. There are certain details that we need to work out with the people in the production line and how they could reduce their transportation cost,” he said.

Transportation is also one of the contributing factors to high costs, he said and pointed out that there are many other services affecting cost.

“But we take it that cabotage is one area that we have to work on with investors to see how we could reduce their costs. I don’t think cabotage is the only issue that is giving them problems,” Tan stressed.

Meanwhile, Deputy International Trade and Industry Minister Datuk Jacob Dungau Sagan who was also present at the press conference, said the federal government realises that what the industries in Sabah want is for international carriers and shipping lines to be allowed to bring imported goods directly into the state.

Sagan however pointed out that international carriers and shipping lines are reluctant to come to this part of the country because of the cost they will incur.

“We do not have enough load from the ports here for them to ship out. So they always think twice about coming here if they have to go back with insufficient load,” he stressed, adding that the ministry is seriously looking into the matter.