Loke says cabotage policy will be restored in Sarawak to strengthen local shipping industry

KUALA LUMPUR (June 22): Cabotage policy will be restored in Sarawak at the request of the Sarawak government, Transport Minister Anthony Loke Siew Fook said.

He said the policy aims to support the development of the country’s shipping industry, especially in Sarawak, given the large number of shipping companies and shipbuilding companies present in the state.

“At the request of the Government of Sarawak, we have agreed to reinstate the cabotage policy to support the development of the domestic shipping industry in Sarawak,” he said while commemorating the maiden voyage and inaugural call of the newly built container ship, MV MTT Bintangoron Saturday at West Port in Port Klang.

Loke explained that the cabotage policy was disabled in June 2017 and there was a misconception that it prohibited foreign ships from calling directly at Sabah and Sarawak ports.

“Previously, there was a policy of designating Port Klang as the national loading center, but I have clarified that we no longer have this policy… Foreign ships can now call at any port in the country without any problem,” he said.

He explained that the cabotage policy applies to domestic shipping between ports on Peninsular Malaysia and ports in Sabah and Sarawak.

“The policy is similar to those of our domestic airlines. For example, international airlines cannot operate flights between Kuala Lumpur and Kuching, Sarawak; only Malaysian Airlines can provide such services.

“However, international airlines may operate flights directly to Sabah and Sarawak, such as Singapore Airlines flying to Kuching or airlines from China and South Korea flying to Kota Kinabalu,” Loke said.

He stressed that the restoration of the cabotage policy in Sarawak means that only domestic ship operators will be allowed to transport goods between Sarawak and Peninsular Malaysia or Sabah.

“This policy, which was requested by the Sarawak government, aims to protect local shipping companies and increase their confidence in investing in new ships for the local market,” he said.

Loke noted that the 2017 exemption from the cabotage policy allowed foreign ships to transport goods from Peninsular Malaysia to Sabah and Sarawak.

However, he said the exemption had not helped reduce consumer prices in these states, including Labuan.

“The exemption had a negative impact on the domestic shipping industry as the opening of competition to foreign ship operators resulted in many local shipping companies being unable to compete, leading to them ceasing operations,” he said.

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