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An open letter to the Transport Minister
Published on: Sunday, February 26, 2017

By Datuk John Lo
You will forgive me, as a Sabahan, for being sceptical of your latest statement on the Cabotage Policy on 17 February 2017.

Like the saying goes, once bitten twice shy. Sabahans have been suffering from the yoke of Cabotage Policy for more than 30 years or 1 ½ generations. I am sure you can appreciate the reason for my taking your statement with a pinch of salt in view of your previous statements in 2015, 2016 and promises of Transport Minsters before you. In all these years, MCA has been in charge of the Ministry .

In September 2015, you have been reported to have said “Federal Government looking at further liberalising Sabah’s Cabotage policy”, nothing has happened.

In February 2016, you refuted that Cabotage Policy was responsible for the high cost of living in Sabah.

You cited and put the blame on other economic several factors. You formed another committee.

Nothing happened again!

Sabahans have never blamed the Cabotage Policy as the only cause of Sabah’s high cost of living.

However, I would, with respect, request you to differentiate Cabotage policy as a Federal Government policy and other economic factors. Cabotage Policy is a heavy millstone hung around Sabahans’ necks by the Federal Government. Federal can easily revoke, repeal this policy or implement measures to soften its impacts for Sabahans. Solutions to economic factors may take a bit longer as it may not have control of everything, especially external factors. After more than 30 years of Cabotage Policy, the Federal Government and Ministers like you, having been elected and sworn into office to look after the people’s welfare, it is your bounden duty to resolve Sabahans’ sufferings from Cabotage and all other factors that have been contributory to Sabah’s exceptional high cost of living.

The Federal Government and Federal Ministers should have ensured that Sabahans can enjoy similar standard of living as W Malaysians, same level of income and prices and equivalent economic development.

Why is it that Sabahans have to suffer the indignity and discrimination of lower income and higher prices?

Please remember Sabahans pay the income tax rate as W Malaysians. No number of excuses are acceptable as we do not wish to be maltreated for another 30 years. Your Ministry cannot use so called other cost factors to deviate from resolving problems of the Cabotage Policy. You have no respectable shipping industry to show after inflicting 30 years of Cabotage Policy on poor Sabahans.

I am not sure your latest statement in Kota Kinabalu, though very much short of expectation, is genuine.

Many Sabahans will wonder if you have been impelled by the coming election. To be convincing, you will need more than mere some general verbal statements in Kota Kinabalu. So please allow me to comment on your statement as reported on 17 February 2017 in the Daily Express.

Quotation Attributed to you: The Transport Ministry (MOT) has agreed to open up the cabotage policy in Sabah as a step towards helping the state’s economic growth.

I can’t believe you would make the above statement again after so many similar promises.

Agreed to open up the Cabotage Policy again? Your statement is the epitome of political double talk and pure procrastinations.

Quotation Attributed to you: “The minister, Datuk Seri Liow Tiong Lai said the Federal Government would continue to be attentive to Sabah’s concerns, to provide the best economic environment for it.”

My dear Sabahans don’t believe it. This sort of statement comes every time before a general election.

After that, it is all forgotten till the next general election. All the time, Sabahans are made to pay higher prices.

Quotation Attributed to you: “Sepanggar port, here, will soon be as busy as major transshipment ports in the region with plans to make it a maritime hub alongside Port Klang that will make Malaysia Asean’s premier logistics hub.”

This is a very general statement with a political intent and no substance. Building up a marine hub takes a long time. Please give a schedule to show you have a serious and workable plan like how you will promote and market KK as a marine hub.

Quotation Attributed to you: “The Federal Government has approved RM1.1 billion under the 11th Malaysian Plan to upgrade the port and is also in the midst of further liberalising the much-debated Cabotage Policy.”

Please show Sabahans the approval of RM1.1 billion, how and when this allocation will come.

What assurance that it will come?

Please give your policies and implementation details of liberalisation of Cabotage Policy.

Forgive me for wanting them as these sorts of promises have been bandied about ad-naeasum by one Transport Minister to the next.

Quotation Attributed to you: Transport Minister Datuk Seri Liow Tiong Lai said the move is aimed at leveraging the port’s strategic location along the shipping route of the East Asian sea trade and centre of the BIMP-Eaga region.

He also noted that Sepanggar is a favoured port of call for exporters from South America and Australia sending their goods to China.

Would you justify your above statement? Give us your plan on how it can be realised.

There is little trade within and among BIMP-EAGA nations. If Malaysia is dead on wanting to keep its Cabotage Policy, Philippines, Indonesia and Brunei want the same too to protect their shipping industry!

Malaysia does not hold exclusivity on “brilliant ideas”.

With due respect, South America and Australia exporters using Sepanggar as their favoured port of call is very farfetched. Not convincing at all.

Quotation Attributed to you: “These initiatives will significantly address the issue of trade imbalance that may result in reducing the cost of ocean freight. This will eventually lead to not only lowering the cost of doing business and the cost of living in Sabah, but also enhance the State’s economic competitiveness in the long-run,” he said, when opening the two-day Sabah Port Forum, Thursday.

Above statement sounds nice but have no economic relevance in reality. Your idea seems to be an afterthought for it has little economic basis. Without a really innovative and novel marketing/promotion plan to attract exporters that you have mentioned, it is just hot air.

Quotation Attributed to you: “According to Liow, the port would be transformed to match that of Port Klang, whereby the transhipment of goods from Kalimantan in Indonesia, Palawan in the Philippines and Brunei would arrive here before heading to its destinations.”

Looking at the nature of exports from the above areas that you have mentioned, why would they transhipment in Sepanggar? Take Brunei for example, Sepanggar is too near and her exports now and in the future will be petroleum products. They don’t need transhipment. Palawan has no export to talk about and geographically, there is no logic for it to use Sepanggar. Kalimantan’s major exports will be oil palm and minerals.

It will have more planted acreage than whole of Malaysia, meaning they will sufficient volume for direct shipment to China and India.

Quotation Attributed to you: “Besides the RM1.1 billion allocation, long-term expansion of the port would also be carried out in stages and bankrolled by public funding from development expenditure.”

Thank you for your generosity. Seeing is believing. Tell me again when the money is in our Statement Government’s coffer.

Quotation Attributed to you: “The initial port expansion would involve expanding the Sepanggar Port’s berth length from 500 metres to 1.2km and the stacking area from 15 hectares to 60 hectares, with an additional operations area to increase handling from 500,000 TEUs (Twenty Equivalent Unit) to 1.25 million TEUs.”

I thank you for this. Much appreciated. When will be the commencing and completion date?

Quotation Attributed to you: “Liow said the upgrade would be timely as the shipping industry has become increasingly challenging and many global shipping firms are consolidating to keep afloat.”

Your above statement’s two parts do not jive. Please educate us how they can be reconciled.

They can make sense for 1 reason and 1 reason only. That is if Sepanggar can offer compelling economic or cost reduction reasons for the shipping industry. I don’t see how it is possible. You have also omitted to give justifications.

Quotation Attributed to you: “He also said the vessels have doubled in size the past 25 years from 3,000 TEUs to 22,00 TEUs now, adding the upgrade would ensure Sepanggar Port would keep pace with the progress.”

I am in agreement with this statement Sir. When can you start work?

Quotation Attributed to you: “Malaysia is also increasingly becoming a favourite cruise destination where 435 cruises with 682,000 passengers are calling in the same year, he said.”

Please don’t get confused. Our Chief Minister Datuk Musa has already designated KK port, not Sepanggar as the cruise terminal! He has acted on the cruise terminal years ahead of you.

Quotation Attributed to you: “However, for Sabah to unlock to potentials of container exchange it has to deal with the lack of manufacturing and downstream processing activities that led to insufficient container volume.

The volume of import containers is twice as large as export containers, thus affecting freight rates with ships having to return half-empty. The average size of shipment or container exchange in Sepanggar Port, for instance, was 287 TEUs in 2016, compared to 500 to 1,200 TEUs container exchange prevailing at the container ports of Peninsular Malaysia,” he said.

With due respect, Sabah State Government under Musa has done all it can to promote investment in the last 10 years. Sabah is now one of the most popular investment destinations in Malaysia.

I must say this to you in all sincerity; it is the Federal Government’s neglect of Sabah that has contributed to this lack of container volume. So please direct your remark to your fellow Cabinet colleague.

To a large extent, your ministry is also to be blamed for the W Malaysian centric transportation policy.

So much attention and resources have been spent on Port Klang. What help have you given for Sabah’s port facilities?

Quotation Attributed to you: “Towards this end, Liow cited a World Bank study on the National Port Strategy commissioned by the Economic Planning Unit that shipping costs were not the main cause of the higher prices of goods in Sabah but the weak distribution channel.”

Not worth for me to make any comment as the Federal Government should have sorted all these factors out years and years ago. Dato Seri, Proton will have Chinese investors. Their investment is being seen as in the national interest by Federal Government. It is no longer a ‘sacred cow’. So why should the Cabotage Policy be a sacred cow after 30 years? Learn from the aviation industry which is also under your jurisdiction.

The ‘Open Sky Policy’ has given Malaysia a booming tourism industry. Please think about these 2 points.

Much time has been lost. Sabahans have been made to suffer and burden from Cabotage Policy far too long.

If you are really sincere in wanting to do Sabah a favour, there are many options for you to remedy this ridiculous situation. You don’t have to wait for 11th Malaysia Plan. May I remind you that the Federal Government has also imposed another shackle on Sabah by allowing the ship owners ‘the BLOCK EXEMPTION ON COMPETITION’.

Your assurance on liberalization is meaningless unless this exemption is also taken away.

Monopoly, by its very definition, cannot be beneficial for Sabah and the country especially the shipowners have no ability to grow and compete on the regional level.

The shipowners are just like “kampong bullies”. Not one of them has and can build up a creditable shipping company. I have asked you before and now do so again, you must make your choice so that we know whose side you are on – Sabahans or the ship owners. Don’t be a political wishy-washy.

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