'Offset cabotage's effects' call

KOTA KINABALU - The controversial Cabotage policy was designed for national interests but imposes unfair disadvantages on the Borneo components, i.e. the Sabah economy, especially on export-oriented manufacturing and import of consumer goods.

Sabah, therefore, has been made to pay a heavy price for a national policy.

"Like other countries, Malaysia also wanted to protect its domestic shipping industry.

Our major shipping companies are powerful vested interests with a strong influence over shipping policy.

"That is why even the partial liberalisation of the Cabotage policy in 2009 to allow limited international shippers to pick up foreign-origin transshipment cargo from Port Klang to Sabah was possible only because of strong intervention by then Transport Minister (now Tan Sri) Ong Tee Keat," said Sabah Progressive Party (SAPP) President Datuk Seri Yong Teck Lee.

He said that if Malaysia insisted on keeping the Cabotage policy without further alienating the Borneo states, then it must look at the compromises adopted by other countries to offset the adverse effects.

"For instance, the Australian federal government provides RM300 million per year for the Tasmania Freight Equalisation Scheme to alleviate the tariff costs disadvantage faced by the Tasmanian island economy.

"In Malaysia, according to Minister Datuk Seri Idris Jala, we spend RM4.6 billion per year on road tolls subsidies to alleviate the burden of road users in the peninsula.

"Why can't the same government bring down our shipping tariffs caused by the national Cabotage policy by providing some funds, which in any case will help in standardising prices in the country? " he asked.

Federation of Sabah Industries President Datuk Seri Wong Khen Thau, meanwhile, said increasing the local load shipment for a discount as opposed to the abolishment of Cabotage Policy would not address the disparity in the prices of goods in Sabah.

He said local businesses are pining for a fair trade but were not able to push for exports due to the suppressive policy. The presence of a cartel-like group manipulating local liners are behind the dampening performance of local industries via cost-push factor.

On July 2, Sabah Bumiputera Chamber of Commerce Honorary Treasurer Datuk Roselan Johar suggested to local industries to venture into cooking oil and seaweed production and also corn planting to boost inbound freight and address existing trade imbalance.

Roselan believed that abolishing the Cabotage Policy would do more harm than good to the country's shipping industry as more foreign shipping firms will find ways to get involved in domestic trade.

"The shipping cost here is far expensive in Sabah. This is because of the pricing they put on the local importers. The charges are so ridiculous compared to any international pricing standards in the world," he said.

This is done through lengthy shipment delays of transporting inbound goods to Port Klang and vice versa, notwithstanding local shipping companies have been waived from taxes from the government.

Wong, who noted FSI is not against the policy, however demanded a fair trade, a "win-win" formula, such as full liberalisation or tax exemption or an equalisation formula (subsidies to every container into Sabah to push cost down), or make Sabah a major shipping hub replacing Port Klang.

"Have a reverse of the Cabotage policy, they come to Sabah instead of Port Klang.

Then you will increase the load.

"We must grow also because we are paying to them (shipping industry)," he said.

DE