No overnight price reduction
Published on: Friday, May 12, 2017
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Kota Kinabalu: Much is still to be done to ensure a reduction in the prices of goods and the work will begin when the Cabotage policy exemption on Sabah, Sarawak and Labuan is implemented beginning next month.Federation of Sabah Industries (FSI) Honorary Life President Datuk Seri Wong Khen Thau said the public must have a clear understanding that the Cabotage policy is not just about freight charges but also other issues.

"The Cabotage policy is not solely about price reduction but also about fair prices and fair competition and their effects on the growth of the manufacturing and other sectors in the country.

"We believe the so-called reduction in price will not be happening overnight as claimed by many quarters," he said during a joint press conference, here, Thursday.

Among those present were representatives of FSI, Sabah Housing and Real Estate Developers Association, Sabah Timber Industries Association, Malaysia Plastic Manufacturers Association (Sabah), Malaysian International Chamber of Commerce and Industry (Sabah), Kota Kinabalu Chinese Chamber of Commerce and Industry, Kota Kinabalu Forwarding Agents Association, Kota Kinabalu Container Lorries Association, Sabah Employers Association and Auto Traders Association of Sabah.

"Prices of goods will not drop immediately beginning June 1 as this is not a tax policy. It will take some time for the momentum to build up and if we are lucky, we may see some changes in prices a month after.

The people should understand how the Cabotage policy works."

Towards this end, Wong said FSI and the other associations strongly believe that several measures should be taken so that the liberalisation announced by Prime Minister Datuk Seri Najib Tun Razak will be realised more effectively.

"Firstly, the Government must endeavour to generate enough publicity and constantly promote the latest liberalisation move to the global business communities and attract foreign liners to call on Sabah ports for what good is the move if there is lack of awareness.

"The licensing authority also plays an important role in its effectiveness in implementation, above all, by adopting business-friendliness and reducing bureaucracy in issuing licence to foreign vessel owners keen to serve in this region," he said.

He added that a national logistics council should be formed and it should be well represented by stakeholders from the peninsula, Sabah and Sarawak for holistic views, input and coordination mechanisms to advance the nation's logistics development and trade facilitation.

"Apart from that, the granting of the block exemption order by Malaysia Competitions Commission under Section 8 of the Competitions Act 2010 to Malaysia Shipowners Association (Masa), Shipping Association of Malaysia (Sam) and Federation of Malaysian Port Operators Council (FMPOC) must be withdrawn. Such is a glaring example of anti-competitive behaviour and unfair trade practice to the detriment of Sabah's development.

By continuing to protect ship owners through the block exemption, the Government's effort to reduce prices through further liberalisation is counter-productive."

He also urged the realisation of the Sepanggar Bay Container Terminal (SBCT) as a hub port must be given top priority by the Federal Government in order to speed up foreign vessels calling on Sabah ports and to address imbalance issue.

"We feel that the RM1.1 billion allocation for SBCT is nowhere close to the government allocation for development of Port Klang as the hub. If we aspire to create another hub, we appeal for more funds for future planning…the Federal Government should allocate a few billion ringgit every year for the development of the hub," he said.

He also reminded the people that the recent announcement by the Prime Minister on May 7 does not amount to abolishment of the Cabotage policy.

"The Cabotage policy is still intact for the simple reasons that there is no repeal of the law giving effect to the Cabotage policy, and there is no exception to be given between Sabah and Sarawak ports."

Although the recently announced move is not the abolishment of the policy that they sought, Wong said they take the latest announcement with open hearts and hope the liberalisation move does not stop there.

"There are more measures we need to consider to ensure the full implementation of the full liberalisation to the benefit of Sabah and Sarawak."

Wong appealed to all private sectors, including shipping companies, to work together to achieve these causes and the development for the nation as a whole.

"However, we are not pursuing these causes for one sector only, we need to consider the holistic picture in building a strong Malaysia with equal level of economic development.

"Sabah and Sarawak are still far behind, we in the private sector feel that there must be a catch-up plan to bring about balanced development and create an egalitarian level of the two regions – East and West Malaysia," he said.

Meanwhile, Sabah Timber Industries Association (STIA) President Stephen Chaw welcomed the full liberalisation of the Cabotage policy, saying it is a win-win for all.

However, he said the move must be accompanied by improvement in port infrastructure.

"It took 30 years for Port Klang to be a hub and unless there is going to be improvement in port handling and services, it will be difficult to convince major shipping lines to make Sepanggar as transhipment hub," he said. - Ricardo Unto


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