Sarawak DCM: Putrajaya to study if cabotage policy lift will reduce prices
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KUCHING, May 19 — The Transport Ministry will conduct a study on whether the removal of the cabotage policy from Sabah, Sarawak and Labuan will lead to cheaper goods in Sarawak, the state’s deputy chief minister said today.
Tan Sri Dr James Masing said the review will be conducted six months after the cabotage exemption takes effect on June 1 this year.
“There are other claims to say that the exemption of the policy would not lead to lower prices of imported goods to Sarawak, then there has to be some other reasons why it is so,” he said, explaining the need to conduct a detailed study.
Winding the debate in the state legislative assembly, Masing, who is also the state minister of infrastructure development and transportation, suggested there could be other cost factors within the transportation chain that the government might have overlooked that would not lead to lower prices of imported goods in the state, even with the policy exemption in force.
He said the state government is willing to listen to opinions and input from consumers and shippers who are both affected by the policy.
“Whatever it is, the state government will have to take everybody’s views into consideration and coming up with solutions that benefit the majority of the people,” he said.
He said it is normal for consumers to assume that the cost of goods would be reduced in proportion with the reduction in ocean charges, which is a component that is directly related to the policy.
Explaining the rationale to call for the abolition, Masing said the government has made a comparison on the ocean freight charges for Port Klang to Kuching and Bangkok to Port Klang for the purpose of calculating the rate based on transit time, not on distance.
He said both with transit time of three days and based on a 20-footer containerised cargo, the ocean freight from Port Klang to Kuching is at RM1,830 (US$425), while the ocean freight for Bangkok to Port Klang is RM645 (US$150).
“That is a difference of RM1,180 (US$275),” he said.