Sabah has potential to become major maritime Transshipment Hub

Posted on : 16-02-2017 | By : sabah today | In : Local Business

KOTA KINABALU: Both the Sepan­gar Bay Container Port and Port Klang have been earmarked as the two harbours that will turn Malay­sia into a logistics hub in Asean, said Transport Minister Datuk Seri Liow Tiong Lai.

The Cabinet, said Liow, recently discussed making the country into a logistics hub for Asean, with Sepan­gar port playing a role in the growth area of Brunei, Indonesia, Malaysia and the Philippines.

“Sabah is uniquely and strategically positioned within the Asean sub-region of BIMP-EAGA (Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area).

“The development of this location is highly dependent on the creation of inter-regional transport links that will make Asean the world’s eighth largest economy,” Liow said in his welcoming remarks at the Sabah Ports Forum here yesterday.

Also present was Chief Minister Datuk Seri Musa Aman.

Sabah, he said, was in an advantageous position as a staging hub for product distribution within Asean as sea routes from South America and Australia to China would favour the state due to its geo-strategic location.

But Sabah, pointed out Liow, needed to unlock its potential to become a major player in the maritime and logistics sectors.

“Issues such as the lack of manufacturing and downstream processing activities that have led to insufficient container volume need to be addressed,” he said, adding that currently, the volume of exports was only half of the imports, leading to ships returning half empty.

This, said Liow, gave no compelling reason for main line operators to call at Sabah ports, which led to containers being transhipped at Port Klang or other ports in the penin­sula.

The Government, he said, had approved RM1.027bil under the 11th Malaysia Plan to turn Sepangar Port into a transhipment hub that could boost connectivity to international markets, generate higher volume of cargo and attract shipping lines to call at the port.

Liow, who also visited the Sepangar Bay Container Port, said the Government was set to further liberalise the cabotage policy, which had been blamed for higher costs of goods in Sabah.

“As a responsible and caring one, I am pleased to inform that the Government is currently reviewing the cabotage policy for a further liberalisation mechanism to ensure affordable cost of goods and servi­ces,” he said.

(The cabotage policy requires all domestic transport of goods to be done by Malaysian vessels, which means that goods bound for Sabah and Sarawak will have to come in via Port Klang).

Liow said there had been a long standing debate on the root cause of higher prices of goods in Sabah, with many having attributed this to the policy.

However, he said a joint study by the World Bank and the Economic Planning Unit in November 2016 found that neither the policy nor the shipping costs were the main cause for the high prices of goods, which were instead due to weak distribution channels, high handling charges and inefficient inland transportation.


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