'Revive Labuan Shipyard' call
Published on: Thursday, June 29, 2017
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Labuan: A political actvist suggested that the Government help revive Labuan shipyard and bring back its glory years when it was a leading contributor to the local economy rather than the oil and gas sector.Lau Seng Kiat, who was an Independent candidate in the 2004 general election, said during its heydays the shipyard stood out as a regional leader with some 3,000 employees including subcontractors, vendors and others benefiting from the contractors of the company. "The oil and gas sector was not in full bloom yet."

Sabah Shipyard as it was then called and now Labuan Shipyard & Engineering Sdn Bhd (LSE), was established in 1972 and much earlier than the Asian Supply Base (ASB). The yard has impressive state-of-the-art facilities and built 16,500 dwt palm oil/chemical tankers for MISC which were said to be the largest built in the country.

It also supplied power barges to the Philippines, Pakistan and SESB to fast track industrial development.

The yard also built cement and log carriers and tugboats.

"But due to lack of continued support the shipyard slipped from its position and was overtaken by the oil and gas boom," said Lau.

Lau noted that compared to LSE, the ASB was only established in 1980 and in the earlier years it hardly had the same impact to the local economy as LSE.

"Only in the last five or more years the oil and gas boom started in Labuan and it saw ASB the integrated logistic provider to the oil and gas industry extending the yard from 208 acres to 325 acres to handle the influx an new industry players. Earlier it was LSE that provided the lifeline," he said.

Lau said that since LSE was still operating though in a shrunken state with only about 100-odd workers "the yard has the potential and it should be revived to replace the gloom that has settled in the oil and gas sector.

"Such replacement would ensure that even with the oil and gas sector ticking as before, Labuan's economy could be vibrant."

Lau went on to say that it would be foolish to think that the story of Labuan has ended following the tottering state of the oil and gas sector.

He said in the past Labuan was vibrant when the American company Brown and Root was based here to build huge marine platforms for the gas fields.

Barter trading also kept Labuan's economy dynamic. "apart from LSE, the labour-intensive 86 milion ringgit Halal Hub's full potential should be tapped."

Lau said when the hub was built it was stated that high-quality processed seafood would be produced and distributed to domestic and international markets "but so far the industry has hardly made any positive impact on the local economy and many were asking whether it was a colossal flop kept under cover."

Lau said if the LSE and the Halal Hub could move on full gear the loss of oil and gas activities would not have so seriously affected the island.

As for boosting tourism to help the economy to turn around, Lau said many were doubtful this could produce the result.

He said increased tourist arrivals would help certain segments of the economy but warehouse, car sales and other businesses would not enjoy much.

"Moreover the curbs on sales of cigarettes, beer and liquor already have a damaging effect on tourism, your can't expect tourists to keep coming here just to watch sunsets, scuba diving or swimming.

"Such activities could also be done in Sabah and maybe at a cheaper cost," added. - Sohan Das



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