Cabotage findings for Cabinet

2009-06-04 Daily Express

Kota Kinabalu: Deputy Transport Minister Datuk Haji Lajim Hj Ukin said the study on the Cabotage Policy following calls by Sabah Members of Parliament and logistics players for it to be reviewed has been completed.

The Ministry would be discussing it soon with the relevant departments and agencies and the Report will be submitted to the Cabinet.

"Since it is a policy, only the Cabinet can decide," he said, when asked about Federation of Sabah Manufacturers (FSM) President Datuk Wong Khen Thau's renewed call on Friday for abolishment of the policy.

Transport Minister Datuk Seri Ong Tee Keat during a visit here last August assured that the Cabotage Policy - blamed for the huge difference in prices between East Malaysia and Peninsular Malaysia - would be liberalised progressively.

He said the Ministry was re-visiting and reviewing the policy while at the same time looking at the proposal from the Malaysian Logistics Council as well as from the State Government.

He maintained that the Cabotage Policy is not the sole factor for the price differences as other factors like freight charges and inland transportation also played a role. The issue was raised in Parliament by Sabah MPs who demanded it be revised so that goods in Sabah could be cheaper.

Wong, who had also suggested an "open policy" to prevent monopolisation and manipulation of prices by shipping cartels, and which in turn would benefit Sabah in terms of competitiveness in the export market and the consumers as a whole.

FSM sent a follow-up memorandum to the Ministry in September.

Meanwhile, Sabah Progressive Party (SAPP) also called for the Cabotage Policy to be abolished.

SAPP Treasurer General Datuk Wong Yit Ming in a statement said that the policy hinders the growth of manufacturing in Sabah and Sarawak.

Sabah will always have to "play catch up" with those from peninsula and this will pose a major challenge to the success of the Sabah Development Corridor, he said.

"The policy deprives Sabah's industries, the competitive ability to survive let alone compete with her peninsula counterparts. Unless the policy is abolished, there is no way for us to compete fairly, openly and ideally due to the uneven playing field," he said.

"The cost of doing business in Sabah will be higher due to the high freight charges especially for imported raw materials as they would have to be transshipped via Port Kelang contributing to double handling cost," said Wong.

"Currently food products (such as rice) in Sabah are much higher than in peninsula. Why must poor people in Sabah pay more and subsidise the rich in peninsula?

The cabotage has contributed to the high price of essential goods," he stressed.

"Adding salt to the hardship faced by Sabahans, even pharmaceutical products such as Panadol are more expensive than in peninsula.

"This makes a mockery of the State Government's plan to achieve zero poverty by 2010," he said.

The lopsided policy benefits majority shipping companies based in peninsula, while Malaysians in Sabah are made to pay more to satisfy the needs of the so-called shipping industry. He said this policy should not have been there even from the beginning.

It has been exploited to form a cartel, which is a way to monopolise the business and benefit only the major players, he said. Wong said the State Government is obliged to use its influence with the Federal Government to open up the ports around Sabah.

"This can be done by granting a special exemption from the Cabotage Policy for Sabah. The Sepangar Bay Container Port Terminal should be made a National Load Centre in Sabah.

"They should also resolve the high costs of imports and exports in Sabah to a reasonable levy by the providers of port services," he said, adding that in their intention to develop, protect the port and shipping services and industry, the Government should subsidise vessels plying between East Malaysia and Peninsular Malaysia in order to the lower the freight charges and benefit the people of Sabah.

"The Government should not do it at the expense of East Malaysians through the lopsided cabotage policy," he said.