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Cabotage policy to be reintroduced in Sarawak
Published on: Sunday, June 23, 2024
By: Bernama
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Cabotage policy to be reintroduced in Sarawak
Loke said this policy aims to support the growth of the domestic shipping industry, particularly in Sarawak, due to the high number of shipping companies and shipbuilding activities present in the State.
Kuala Lumpur: The cabotage policy will be reintroduced in Sarawak at the request of the Sarawak Government, said Transport Minister Anthony Loke. 

He said this policy aims to support the growth of the domestic shipping industry, particularly in Sarawak, due to the high number of shipping companies and shipbuilding activities present in the State.

“At the request of the Sarawak Government, we agreed to reinstate the cabotage policy to support the growth of the domestic shipping industry in Sarawak,” he said during the commemoration of the maiden voyage and inaugural call of the newly-built container vessel, MV MTT Bintangor, at West Port, Port Klang, Saturday.

Loke explained that the cabotage policy was exempted in June 2017, and there was a misconception that it disallowed foreign vessels from directly calling at Sabah and Sarawak ports. 

“Previously, there was a policy designating Port Klang as the national load centre, but I have clarified that we no longer apply this policy…. Foreign vessels can now call at any port in the country without issue,” he said.

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

“The policy is akin to our domestic airline regulations. For example, international airlines are not allowed to operate flights between Kuala Lumpur and Kuching, Sarawak; only Malaysian airlines can provide such services. 

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

He emphasised that reintroducing the cabotage policy in Sarawak means that only domestic vessel operators would be allowed to transport goods between Peninsular Malaysia and Sabah and Sarawak. 

“This policy, requested by the Sarawak Government, is intended to protect local shipping companies and boost their confidence in investing in new vessels for the local market,” he said. 

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

However, he said, this exemption did not help reduce consumer goods prices in these states, including in Labuan. 

“The exemption had negative impacts on the domestic shipping industry, as opening up competition to foreign vessel operators led to many local shipping companies being unable to compete, resulting in them ceasing operations,” he said.

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