Sabtu, Februari 25, 2012

S'WAKIANS ALSO AGAINST THE CABOTAGE POLICY

S'wakians also against the Cabotage policy

February 23, 2012: Kota Kinabalu: People in Sabah seldom hear of Sarawakians complaining about the Cabotage Policy that is popularly blamed for contributing to the higher cost of living in Sabah when compared with prices of many local and foreign goods in West Malaysia and Sarawak.

This is because under the policy, all goods from wherever they originate and even if the source is closer to Sabah and Sarawak must still first go to Port Klang before proceeding to Sabah and Sarawak in domestic ships, an arrangement that costs time, money and additional charges for handling, etc. However, the shippers do not face the squeeze because the additional costs are transferred to the consumer through higher-priced items.

It has become a major issue in Sabah where industrial and consumer goods are said to be up to 30pc costlier because of this - reasons cited for the higher cost of living. The Barisan Nasional Government acted to liberalise the policy somewhat but it did not go far enough to satisfy business sectors and consumers in Sabah. The opposition has said that it will dismantle the policy if it comes to power.

Azman Hezri, a Sarawak Bumiputra supply chain and logistic business expert, was invited by the Sabah Economic Development and Investment Authority (Sedia) and SME Corporation Malaysia to speak at a Sabah Development Corridor (SDC) seminar recently on promoting SMEs and entrepreneur development in Sabah. He shared his views on the Cabotage Policy and related issues with Special Writer David Thien.

DE: What is your general view about the Cabotage policy which has blamed for higher cost of doing business in Sabah?

Azman: On the whole, it is bad for Sarawak as well. It was made a national policy for the interest of the domestic shipping industry at the expense of people in Sabah and Sarawak. Some politicians are well connected in the industry. Sabahans and Sarawakians are just too weak to influence national policies made in Kuala Lumpur by vested interests knowing that their representation politically does not count for much in Parliament.

DE: Should the state governments of Sabah and Sarawak set up their own shipping lines as well as airlines?

Azman: I am not so much in favour of the idea of government getting involved in business. It is already bad enough if you know what I mean.

Things can get messy when exploited looking at MAS and past bailouts with public funds. Taib (Sarawak's CM) has friends and ties in some Sarawak shipping firms. I am sure in Sabah private ship owners prefer less competition. The policy does add higher logistic costs on business.

Let me share a secret with you. Most shippers have already factored in the cost of their containers returning empty to Port Klang in their pricing. (from East Malaysia).

DE: What do you think can be done?

Azman: Speaking from my experience, some shippers already give lower rates to selected customers even when the policy was in force.

It is up to you how to negotiate. I know this because I do get to enjoy discount (in Sarawak) even before the partial liberalisation of the policy.

You know, the cost of the space size of every container seat on a ship is already determined for the ship's profitability. If you can save on your logistic costs which can add up to 30 per cent of your product cost, every percentage saved translates to more profit margins earned.

DE: Are you enjoying this because of your political or other connection, like who you know or who knows you?

Azman Hezri: No, what I meant was I could get more goods volume for the shippers' containers to command a better deal. The issue for shippers is the cost of their containers returning empty to Port Klang and most have already factored in the cost to compensate for this. Hence the high shipping cost. As I told some small scale Sabah entrepreneurs, they can set up a collecting station for their goods to be exported from ports in Sabah to Port Klang jointly in containers if they do not have the volume so that they can negotiate with shippers for better rates jointly as a business group.

East Malaysian entrepreneurs especially those in the export and manufacturing sectors in Sabah and Sarawak should be given incentives to expand by better Federal policy in order to grow the export volume sought by shippers to lower costs.

DE: What about the proposal using Brunei's Muara port to bypass the Cabotage Policy as suggested by some Sabah industry players and even BN politicians?

Azman: Yes, that was also mulled in Sarawak but road distance, conditions and border and customs complexities also add on to costs.

Asean is not yet an open border entity. Personally I don't mind using Bintulu Port if there is a good cost advantage for my business as it is a good trans-shipment port with a open sea trough of 15 metres deep compared to Sapangar's 11-12 metres deep (where not all giant ocean going ships can easily dock unlike Lahad Datu Port of 20 metres deep) but even Sarawakians are reluctant to use Bintulu.

DE: Why is that?

Azman: Because it is a federal port. Sarawak does not profit much from its revenue and its facilities."

(Bintulu Port was established for the import and export benefit of the federal driven Bakun Dam project and ancillary industries like aluminium smelting, oil and gas business of Petronas.)

To understand this, just as the Sabah Government cannot profit from the free port on the Federal Territory of Labuan, likewise Sarawak, although the bulk of Petronas' LNG and other products get sucked out of East Malaysia and exported from Bintulu Port and how Kuala Lumpur designated Bintulu as a trans-shipment hub port for East Malaysia since BIMP-EAGA was set up. The tug of war of the Labuan ferries issue with federal and state licensing differences in the landing right issue is one such case in point.

32 ulasan:

  1. This is one of many issues that Sabah is voicing out at the federal level.

    BalasPadam
    Balasan
    1. Yup. Harap ia dapat perhatian sewajarnya.

      Padam
    2. Isu ini tidak harus di pandang ringan.

      Padam
    3. The Cabotage Policy is no longer relevant and it should be abolished. Hopefully the Federal government will reconsider this policy.

      Padam
  2. it appears that Sabah and Sarawak shared the same sentiment pertaining this matter

    BalasPadam
  3. The cabotage policy has a profound impact on the people of the Borneon States.

    BalasPadam
    Balasan
    1. Both Sabah and Sarawak was affected by the Cabotage policy, it has caused the price of goods to be more expensive than those at West Malaysia, which further burdens the people.

      Padam
  4. This policy has an impact on the price of industrial and consumer goods up to 30pc more.

    BalasPadam
  5. Hopefully the federal government will review this matter.

    BalasPadam
  6. cabotage policy telah menyebabkan pebezaan harga antara Semennjung, Sabah dan Sarawak.

    BalasPadam
    Balasan
    1. That is true, our prices of goods in Sabah and Sarawak are more expensive than those in West Malaysia.

      Padam
  7. Cabotage policy keeping Sabahans poor.

    BalasPadam
    Balasan
    1. Cabotage policy must be abolished.

      Padam
    2. Seba itu polisi yang tidak menguntungkan Sabahan patut dimansuhkan. Jangan biarkan Sabahan terus menderita.

      Padam
    3. Jika polisi ini lebih merugikan Sabah lebih baik dimansuhkan sahaja.

      Padam
  8. The federal government had agreed in 2009 to liberalise the cabotage policy for containerised transshipment cargoes for sectors between Sepanggar, Bintulu, Kuching and Tanjung Pelepas and vice-versa.

    BalasPadam
  9. A “full liberalisation” of the cabotage policy would give importers and exporters in Sabah and Sarawak an opportunity to enjoy low fare due to competition in the shipping transport sector.

    BalasPadam
  10. lebih baik mansuhkan saja polisi tu. hanya membebankan rakyat Sabah dan Sarawak.

    BalasPadam
  11. the high costs of goods cannot be blamed solely on the cabotage policy without also referring to the total costs of transportation and logistics ashore including port costs, the high surcharges in Sabah and Sarawak, volume of cargo, geographical factors such as the remoteness of a market, port infrastructure and performance...

    BalasPadam
  12. the Malaysia cabotage policy does not at all prohibit vessels from foreign ports to call directly to/from any Malaysian port including ports in Sabah and Sarawak. for example, a vessel from Singapore or Hong Kong is free to call directly to/from any Malaysian port such as Sepanggar, Bintulu etc.

    BalasPadam
  13. not only in Malaysia, but the cabotage policy are also practiced by many nations worldwide including developed nations. for some of these nations, it is so strictly implemented that no foreign-owned vessels are even allowed to operate within their domestic waters.

    BalasPadam
  14. The government should look into this matter seriously to solve this issue.By solving this issue, it could help reduce the poverty rate in sabah.

    BalasPadam
  15. Keluhan rakyat harus didengar dan kerajaan sepatutnya mengutamakan apa yang rakyat butuhkan!

    BalasPadam
    Balasan
    1. permintaan rakyat harus di utamakan.

      Padam
    2. Rakyat membantah polisi cabotage ini kerana ia tidak memanfaatkan rakyat, tetapi menambah bebanan pula.

      Padam
  16. cabotage polisi ini baik dimansuhkan, ia membebankan Sabah dan Sarawak.

    BalasPadam
  17. Sabah dan Sarawak tidak menyokong Cabotage policy ini, harap kerajaan akan menghapuskan polsii tersebut.

    BalasPadam
  18. I suppose the federal government will look into this issue.

    BalasPadam
  19. Something has to be done regarding the Cabotage policy.

    BalasPadam
  20. If the policy is more detrimental to Sabah revoke would be the solution.

    BalasPadam
  21. The people should be considered and not allowed to suffer any further than this.

    BalasPadam
  22. Harap penduduk Sabah pun cuba untuk menyuarakan masalah cabotage policy untuk negeri ini.

    BalasPadam