Sabahans lose much due to cabotage (Daily Express 28/5/2017)

Of Cabotage as exempted Sabahans had been losers with irrecoverable losses for decades.

Suria Group has submitted a request to Sabah Ports Authority to review its outdated port tariff.

Its group managing director Ng Kiat Min said the port tariff which was regulated under Sabah Ports Enactment had remained the same for the past 30 years.

"Sabah Ports Authority has approved the request and next will be the state cabinet (for approval).

Putatan Member of Parliament Dr Marcus Makin Mojigoh (MMM) had regularly raised the issue of the high handling fees imposed by the State port authority must be reduced as this was an attributing factor of high cost of living in Sabah.  He was making a statement in “Stop protecting shipping cartel-Mojigoh”.

I think we need to be more knowledgeable about the National Cabatoge Policy (NCP).

The National Cabotage Policy (NCP) introduced on 1.1.1980 was the effect of Merchant Shipping Ordinance of Malaya merged with shipping Ordinances of Sabah and Sarawak. Once merged, it became an Act of Parliament, subsequently under this Act, a rule was introduced requiring all ships plying Malaysia ports must be registered in Malaysia. That means any foreign registered vessels cannot on-load and off-load cargoes at Malaysia ports.   The NCP exists because of this rule. This regulation was not passed by Parliament, it was approved and gazette by the Malaysia Minister of Transport.

The liberalisation of cabotage regulations for the transshipment of cargo highlights the Malaysian government’s commitment in transforming Sepanggar Port into a full-fledged Transshipment Hub of the Far East, said Barisan Nasional (BN) lawmakers.

Deputy Chief Minister, Tan Sri Joseph Pairin Kitingan said the long-debated cabotage restrictions have already been relaxed effective June 2009, allowing foreign-registered vessels to import and export freely to and from Sepanggar Port without requiring any domestic shipping license.

“As a result, ships from anywhere in the world are permitted to enter Sabah directly, however the only major problem is the lack of cargo volume to justify their transportation cost which makes it less cost effective for foreign vessels to travel to Sabah,” Pairin said in his reply to Sri Tanjong Assemblyman, Chan Foong Hin in the State Assembly.

As we know that the Sabah State Ports Authority’s operations had been handled by the privatised Sabah Ports Sdn. Bhd. (SPSB) for some decades and in turn SPSB is owned by public listed company Suria Capital Holdings Bhd or also known as Suria Capital Group (SCG) since 2004.  

It is also known that SPSB did not really benefit anything much from the “liberalisation” NCP since 2009 as business was as usual with the said revenue almost flat.

Would the latest “liberalisation” in June 2017 be a reality is yet to be seen with the terms and conditions from the Ministry of Transport and in present scenario the impact on SCG would not be material in performance?

What we witness the NCP since 1980s we knew that shipping costs “leaped frog” in Sabah trade as sort of “cartel” prevailed against Sabah’s interests in the interest of the local shipping owners and associations. However, it was revealed that the excessive shipping costs to Sabah around the turn of the century was that of NCP.  I had been attending seminars and conference since early 1980s and at every event, the participants in trade had always complained of the very high costs of shipping without knowing that cause.

While MMM was of the opinion of cost due to NCP, he also referred to the high handling fees of the Sabah Ports Authority, but members of SCG at the 34^th AGM were categorically told that  the level of port charges since 1970s had not being revised. So MMM, please provide more information of the issue as raised.  

Meanwhile it is to be cognisant that our ports can handle the more traffic from bigger cargo liners but such liners are not expected in big number following the latest full exemption of NCP in June, 2017 as there is no way our cargo from Sabah would suddenly increase in volume.

Meanwhile the Sepanggar Bay Container Port is in the process of expansion and improvement in features and facilities with the RM1 billion plus funding under 11^th Malaysian Plan. The said project would only be completed in a few year time.

While it is apprehensive of the potential increase of port fees, the consumers should be assured that with the increase the all round improvement in the efficiency of the handling of ships at the ports would result in the reduction of the relevant costs to benefit the consumers. Sabahans had been losers since 1980s with irrecoverable losses. .

So consumers should keep watch on the level of prices of goods post June, 2017 when NCP is fully exempted by the Transport Ministry and not in Parliament.

Joshua Y. C. Kong  23/5/2017