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What Sepanggar port success hinges on
Published on: Sunday, March 19, 2017

By Datuk John Lo
I thank Suria Capital and Sabah Ports for the update of measures taken, which I hope, will resolve the Cabotage Policy problems.

They have been heavy burdens for Sabahans for more than 30 years. Judging from the information given, it is obvious that it is still on the talking stage with no firm commitments by the Federal Minister of Transport.

I suppose it will take time for Sabahans to see the finalised plan, policies, implementation and a firm, official financial commitment from the Minister of Transport.

Unless and until then, it is ‘work in progress’ or in simple English – uncertainty. We can wait.

After all Sabahans have endured in silence for so long. We are immunised to waiting.

I suppose another 30 years of Cabotage policy pain will not make any difference!

My open letter was addressed to the Minister of Transport which I hope he will find time to answer some of my questions. I am quite certain I am not alone in wanting the answers. My letter to the Minister is not directed to any party – only to the Minister, he being the elected MP and as Minister of Transport, is answerable to the people of Sabah as well as the shipowners.

I am 100pc in support of any or all solutions to solve problems related to the Cabotage Policy by Suria and Sabah Ports.

The latest ideas that have been given in the Sunday Express on 12th March 2017 are great.

They are being discussed and talked about now is because of years of hard work, lobbying, representations and painful rejections.

They don’t just simply happen. It is important to note and remember who have “dug the well” and now “who is drinking from it”. As I have said, Cabotage Policy has made Sabahans suffer for more than 30 years.

To reach the present conceptual stage, thanks should be given to Datuk Seri Panglima Wong Khen Thau and his group from Federation of Sabah Industries which has been at it persistently for 15 or more years.

Wong has been very vocal on this issue to ministers and politicians in private and public.

Nothing much has happened as they have been confronted with very powerful vested interests.

Luckily for Sabah, we have Datuk Musa as our Chief Minister. Quietly, he has worked his way through the Federal Government to soften its position on this matter.

Without Musa’s efforts, the status quo of “Cabotage Policy is not negotiable” would have continued.

Thanks to him, we are now beginning to see light in the tunnel.

Sabahans must not take things for granted that the problems of Cabotage Policy will go away anytime soon.

To underestimate the “powerful lobby” strength of the shipowners will be our biggest mistake.

To buttress their position, they have managed to convince the Federal Government to grant them the “block exemption from competition” despite strong objections from Sabahans. With this, protection they are unassailable.

Unless and until Sabahans can comprehend the real situation and be united, any chance of an equitable solution is very slim. Sabahans, especially those in opposition parties should therefore unite under Musa’s leadership to achieve an equitable solution to this huge economic problem. Make no mistake about it.

This is not a political problem that politicians should seek opportunistic advantage to gain support.

This is an economic issue that has affected all Sabahans for three decades.

All political parties, Chambers of Commerce and business NGOs should put aside politics, exhibit statesmanship and unite under Musa on whom we can place our hope of an equitable solution. We cannot afford to be divided on this issue as it will send a very wrong signal that we are weak to the Minister of Transport, Federal Government and ship owners.

Here are some good reasons why we must unite:

Long way to go for a final equitable solution: Like I have said, there is little concrete commitment from the Minister apart from his vague comments.

We can’t begin the celebration yet – a lot of water under the bridge has to flow between now and final decision/implementation. I have more faith in this whole thing if the PM can give us the quality of commitment like he has done on the Pan Borneo Highway.

Only talking about liberalisation: The Minister is only talking about liberalisation which is not the same as scraping the Cabotage Policy.

The ship owners’ position is so entrenched that there is no hope of doing away with the Cabotage Policy.

Several successive Ministers of Transport, all of them are from MCA, have bandied and tangled ‘liberalisation’ to our faces. Result? Nothing!

The Minister, like his predecessors, has not even defined ‘liberalisation’ up to now. So how?

Without a definition, which is basic, how to go forward?

Sepanggar vs Bintulu?

Just only last year, the Minister has declared that Bintulu will be developed into a regional hub for transhipment of containers. Several hundred millions of Ringgit have already been committed. Please visit this website: http://www.hellenicshippingnews.com/expansion-project-set-to-turn-bintulu-port-into-regional-transhipment-hub/ Looks like the Minister is trying to court “two girlfriends” at the same time. Will he try to marry both as he has failed to mention the position of Bintulu vs Sepanggar. In my humble opinion, there is insufficient room in the market for two regional transhipment hubs in East Malaysia. The idea is unrealistic. So he will have to decide which “girl” he wants to marry – Sepanggar or Bintulu? Indecisive decision can only mean one thing – Both Bintulu and Sepanggar are unlikely to succeed.

In whole of W Malaysia where the volume is very much greater than in E Malaysia, there is only Port Klang.

Even Port Klang has little Transhipment business, most of which is for E Malaysia.

No business plan: Ideas on paper always look good. The acid test is to come out with a viable business plan that can succeed.

The Minister, judging from his announcement, does not have a clear viable business plan.

There is no intention in my open letter to the Minister to imbue any negative implications on any party.

Anyone with basic knowledge of the Cabotage Policy will know that the Minister’s announcement is very general, scanty in details and unrealistic in assumptions. For example, how will ships from South America and Palawan want to transhipment in Sepanggar?

As a Sabahan, I am in total support of any plan to transform Sepanggar into a 2nd hub if the minister has a definitive confidence inspiring plan, backed up by financial resources to do this. He must also give a viable, realistic marketing/promotion plan. Building the hardware is simple. Making it work, competitive and attractive for foreign ships to use it is a different ball game.

For Sepanggar to succeed as the 2nd hub, the other twin evil “block exemption from competition” which the Federal Government has approved for the shipowners must be scrapped. This exemption in essence means they do not have to comply with the Competition Act.

Few industries have succeeded without competition. Malaysian shipping is the living epitome of an overprotected industry that has failed miserably.

It will not make sense for goods going to Port Klang from China and elsewhere to use Sepanggar as a transhipment hub as W Malaysian importers will incur extra cost in the form of longer shipment time, storage in Sepanggar and transhipment logistic/handling.

Transforming Sepanggar into the 2nd Hub can be done provided there is an imaginative, holistic plan.

KKIA, which has become Malaysia 2nd busiest airport, proves it.

It would be reassuring if the Minister can share his thoughts on the aforementioned points.

Finally, I urge Sabahan political leaders, stakeholders and individuals not simply to accept announcements/promises by W Malaysian Federal Ministers like manna from heaven.

We should speak up when they don’t make sense or not in Sabah’s interest. Speaking up with reasons will strengthen our leaders’ hand in dealing with issues like the Cabotage Policy.

If we can do this, they will be more careful, circumspect and with respect when they speak to Sabahans.

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