Sabah traders may 'ditch' Port Klang for Brunei

Joe Fernandez

The Federation of Sabah Manufacturers (FSM) is quietly working on a Brunei port to land and export goods should the federal government continue to retain the National Cabotage Policy (NCP), which "burdens Sabah and Sarawak".

The policy designates Port Klang as the National Load Centre (NLC) for all imports and exports. Under this approach, all goods moved within domestic waters must be on local ships.

FSM is studying the feasibility of using Muara Port in the neighbouring oil-rich sultanate to help Sabah "circumvent" the NCP and bring prices down in the local market.
"The NCP, despite being partially liberalised recently, is still of no help to the business community in Sabah," FSM president Wong Khen Tau said. "The NCP still restricts foreign ships from directly calling at our ports."

He was commenting yesterday on a call over the weekend by the United Borneo Front (UBF), an NGO, for FSM to take the lead on the Muara Port option.

The UBF blames the NCP for holding back the industrialisation and economic development of Sabah and Sarawak shortly after the formation of Malaysia, as well as for steep prices and the higher cost of living in the two states.

Some 70 percent of Sabah's imports, according to Wong, come from China and other nearby countries. It therefore makes sense for these imports to come directly to the state, instead of being routed through Port Klang at a much higher cost.

Since that cannot happen under the NCP, Wong favours these imports coming in through Muara Port, since it is outside the jurisdiction of the NCP.

What is needed, he said, is a sea link between the Brunei port and Sabah ports, though goods from Muara can also be transported overland to Sabah.

Barges are already being used to transport cement, stones, sand and other building material from Kota Kinabalu to Muara for development activities in Brunei. Basically unpropelled sea vessels, barges, as well as ferries come under the Sabah Ports and the Harbour Department and are outside the federal government jurisdiction.

"Muara is, in a way, a free port and it's independent, with no rules and regulations on vessels operated by international shipping companies," explained Wong. "So, it does make sense if Sabah ports can become feeder ports for Muara Port."

The Sepanggar Port, outside Kota Kinabalu, is not expected to be affected by Muara since the former relies almost wholly on container traffic to generate its revenue.

Muara affords cost-benefit savings

The cost-benefit savings afforded by the Muara option, estimates Wong, can be in the region of 50 percent or more, provided the imports go directly from the ports of origin to Muara.

One container load between Muara and Sabah by a chartered vessel has been worked out to be about RM1,200, compared with the present RM2,600 from Port Klang. Chartered ships come fully loaded and return empty to their ports of origin.

The RM1,200 could be lowered even further if the chartered ships call at Singapore and Port Klang as well on their return journey, instead of going home empty.

There has so far been no official contact between the Brunei and Sabah authorities on the Muara option.

Brunei is a small country and the number of ships calling at Muara may not be that many in number compared with its potential - if the requirements of Sabah and Sarawak are factored in.

FSM is also aware that the distributors in Sabah will play the deciding role on whether to switch to Muara. If need be, they can speak with one voice and demand that suppliers from outside the state send their containers to the Brunei port.

Wong lamented that the Malaysian Shipping Association (Masa) was holding Sabah to ransom through the NCP.

This has meant delays in imports, reduced export volumes because of penalties caused by delays and therefore a higher cost of doing business, besides higher prices, a higher cost of living and lower standard of living compared with Peninsular Malaysia.

FSM figures show that Kota Kinabalu, given Sabah's chronic poverty and state of extreme underdevelopment, just needs four to five ships every week with a capacity of between 500 to 700 containers.

Wong said the number of ships registered with Masa has breached the 3,500 mark, "indicating that the local shipping industry has stabilised and does not need the Sabah, Sarawak shipping routes".