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LABUAN: Labuan Umno urged political leaders in Sabah to stop the ongoing debate regarding the return of Labuan to the jurisdiction of the Sabah Government.

Labuan Umno Chief Datuk Mohd Rafi Alli Hassan said residents of the duty-free island are enjoying a comfortable life, marked by substantial economic growth since its transfer to the Federal Government administration in 1984.

He emphasised Labuan’s thriving oil and gas (O&G) and financial sectors, as well as the establishment of key economic drivers like Petronas Methanol and tertiary education institutions which have greatly contributed to the island’s prosperity over the last four decades.

“Labuan’s status, as a state or a federal territory, has undeniably fostered its development, with 86 government agencies having offices on the island. 

“It’s crucial not to politicise Labuan’s status as its economic sectors are thriving more than many districts in Sabah,” he said Saturday.

Rafi addressed concerns about Labuan’s economic challenges, emphasising that issues like water and power disruptions and an economic slowdown shouldn’t be reasons to return Labuan to Sabah, noting that Sabah faces similar challenges. 

“Labuan faced economic hardships from 2018 due to factors like falling crude oil prices, leading to downsizing by multinational companies and job losses. 

“The Covid-19 pandemic worsened these challenges, along with new customs policies on cigarettes impacting the island’s economy,” he said.

Earlier, Minister in the Prime Minister’s Department (Federal Territories) Dr Zaliha Mustafa affirmed the integral role of Labuan within the federal territories’ framework and dismissed proposals for its return to any other entity as irrelevant.

The issue was raised after Tuaran MP Madius Tangau inquired during a recent Parliament session about the Federal Government’s intention regarding Labuan’s return to the Sabah Government.

This was prompted by concerns about Labuan’s essential needs, such as water and electricity supply, as well as its key economic entity, the Asian Supply Base Sdn Bhd (ASB), being under the governance of the state governance.

Former Sabah Chief Minister Datuk Yong Teck Lee has also advocated for Labuan’s return to Sabah.