SARAWAK has written to Prime Minister Dr Mahathir Mohamad, seeking a review of the state’s exemption from the cabotage policy.

Since June 1, 2017, the state, Sabah and Federal Territory of Labuan have been exempted.

Deputy Chief Minister James Masing told the state assembly today that Sarawak has “earnestly requested” that the federal government revisit the decision.

He said Sarawak also wants the Transport Ministry to conduct an in-depth study on the impact of the exemption “before it causes permanent damage to our local shipping and shipbuilding industries”.

Masing, who is also state infrastructure and ports development minister, said the exemption has created stiff competition between local and foreign ships.

He cited an analysis conducted between January and July that showed foreign-flagged ships accounted for 12.4%, or 2,504 20-foot equivalent units (TEUs), of local sea containerised cargo transport, out of the total 20,279 TEUs outbound from Kuching port.

Masing said foreign-flagged vessels using the direct route from Kuching port to Port Klang carried 8.1%, or 1,635 TEUs, of containerised cargo, and accounted for 1.5%, or 302 TEUs, of trans-shipment to local ports and 2.8%, or 567 TEUs, of trans-shipment to foreign ones.

Foreign participation in local sea containerised cargo transport is expected to increase, he said.

He described the situation as “alarming”, and warned that if not curbed, it “will erode or undermine the shipping and shipbuilding industries in Malaysia, in particular, Sarawak”, referring to the fact that about 60% of Malaysia’s flagship registration is in the state.

On the state’s shipbuilding industry, he said: “The fact is that a majority of the shipyards in Malaysia are located in Sarawak.

“Both of these activities (shipping and shipbuilding) generate economic growth and provide jobs to Sarawakians.”

Former prime minister Najib Razak had made the exemption on the recommendation of the Sabah government and state Barisan Nasional.

Masing said the reason for the move was to bring down the high prices of goods in Sarawak and Sabah, but this has not proven effective.

The exemption allows foreign-flagged ships to transport cargo directly to Sarawak and Sabah ports, giving locals access to goods from international markets without the items having to be brought in via the peninsula. In theory, this is supposed to lower costs. – November 13, 2019.