SIBU: The exemption of foreign ships from the Cabotage Policy for subsea cable repair work will support Malaysia’s and Sarawak’s digital economy ambitions, including the establishment of data centres.
State Transport Minister Datuk Seri Lee Kim Shin said that foreign investment is crucial in for the development of the digital economy in Malaysia and Sarawak, particularly in the data centre industry.
He pointed out the scarcity of local subsea cable repair ships as a significant hurdle.
“For the digital economy development to succeed, access to a sufficient number of subsea cable repair ships is essential, and currently, Malaysia has a limited fleet,” he said in a statement, in response to Transport Malaysia Minister Anthony Loke’s announcement about the Federal Cabinet’s recent decision on the cabotage policy.
Lee added that the Cabotage Policy mandates that only Malaysian-registered ships with a valid Domestic Shipping Licence (DSL) are permitted to transport goods and passengers within Malaysia, including its exclusive economic zone.
This policy came under review following concerns raised by the Sarawak Manufacturers Association to Sarawak’s Special Task Force to facilitate business (SEMUDAH), leading to a series of discussions involving various stakeholders, the latest of which occurred on March 3, 2021, with 68 participants.
Despite the policy’s aim to protect local industries, Lee acknowledged the negative consequences of its strict enforcement, such as increased costs for local ship owners and a decline in demand for their services.
However, he also warned of the risks associated with liberalising the policy, including national security concerns and the adverse impact on local ship owners due to operational and route coverage disparities.
