Chua: Reconsider implementation of Domestic Hubbing Services

Tawau, Apr 15, 2009: Member of Parliament for Tawau, Datuk Chua Soon Bui, urged the Sabah Port Authority to reconsider its implementation of Domestic Hubbing Services (DHS) in Sabah after being briefed by the related business sectors in Tawau.

The DHS policy when implemented, would require all container ships from Port Klang to dock at Sepanggar port before all containers for Tawau, Sandakan and Lahad Datu are transhipped by barges.

She said it was historically evident that ports are the driving force of development and progress in any town , city or country around the world.

"Tawau, with its long history of active trading and barter-trading activities have contributed much revenue in term of taxes and income to the Tawau port authority.

With limited export capacities from Tawau, its exports have reduced considerably in the recent years, the consignees have been bearing the freight charges of incoming containers with additional cost on assumed empty containers out of Tawau." said Chua.

"The direct shipment ensured goods arrived on time in Tawau because 'Time is the main essence in any shipping and logistic activities'.

"With the present economic downturn, Tawau is lucky to maintain an average of 3,000-4,000 containers per month of direct shipment. There is no reason why Tawau should tranship just to save the low volumes of containers port in Sepanggar.

"It was revealed that Sepanggar port only has an average turnover of more than 4,000 containers per month, a reduction from more than 10,000 containers per month since the economic downturn. The DHS policy is seen to be a monopolization to save Sepanggar port at the expense of other ports in Tawau, Sandakan and Lahad Datu.

"This monopoly will lead to Tawau losing its competitiveness with our trading partners of neighbouring areas of Nunukan, Tarakan and Sulawesi in terms of transhipment and convenience. Our trading partners might look for other ways of logistic shipment if transhipment in Sepanggar meets with its teething problems. We will lose our business forever.

"The DHS with its transhipment to Tawau can lead to unanticipated problems and delay. The business sectors would like to know how many barges are required to tranship 3,000 to 4,000 containers per month to Tawau without causing any delay.

Chua said the Sabah Port authority should embark on the BIMP-EAGA regions rather than working on the domestic market through its liberalization and improvement on competitiveness to attract more international activities in the region.

She also disagreed with the reasons given by the Sabah Port Authority that East coast ports such as Tawau will benefit with the implementation of DHS and the shipping agents still have the leverage on the big bulk of palm oil from Tawau.

"The people should not be confused between the container port and the palm oil port in Tawau as they are operated at different locations. The reduction of the RM75 per container by the DHS is insignificant as compared to the total cost of the few thousand Ringgit container.

"If the new government is the 'people government', then the implementation of new government policies should be with people's interests in mind.

She (Chua) urged the state government also to listen to the grouses of the business sectors in Tawau and to stop the DHS policy in Sabah.