Outcome on cabotage to be made only after half-year exemption
KUCHING: The Cabotage policy is to be exempted for six months before a decision is made on whether the policy should be abolished or maintained.
According to Infrastructure Development and Transportation Minister Tan Sri Dr James Jemut Masing, the federal government is exempting cabotage policy for Sarawak and Sabah for six months.
“It is an exemption of cabotage policy for a period of six months by the federal government and not total abolishment of the policy in Sarawak.”
“Within the six months, Sarawak will gauge the situation without cabotage policy to see if it works. If it does, then the cabotage policy will be abolished. Otherwise, the policy might be here to stay,” Masing told The Borneo Post yesterday.
He said this latest decision was made due to two main reasons. Firstly, the abolishment would deprive local shipping companies of business and secondly, for security reason.
“Without cabotage policy, it means international vessels may call at our local ports. The entry of these international vessels may pose a threat to our security. This is something we must take
into consideration,” said Masing who is also a Deputy Chief Minister.
The cabotage policy has been implemented since 1980s.
The policy requires all domestic transshipment of goods to be made using Malaysian vessels. This means if there is a foreign vessel bearing goods for Kuching, it will have to call at an international port such as Port Klang for transshipment instead of going direct to Kuching.
From Port Klang, Malaysian vessels will take over the shipping responsibility of the goods from the foreign vessel and ship them to Kuching.
The process of calling at Port Klang, the transferring of goods from one vessel to another, the use of port facilities incur extra freight charges and other handling expenses.
The cabotage policy thus has been blamed for the high cost of goods in Sarawak and Sabah.
That has been the main reason the Sarawak government has been trying to abolish the policy. It was hoped that by abolishing the policy, Sarawakians may enjoy cheaper goods.
However, the proposal was met with strong opposition from local shipping companies who claimed that high price of goods in Sarawak has been caused by many other reasons and not due to cabotage policy.
They also argued that the abolishment of the policy will squeeze them out of business as their services will no longer be needed.