The Sabah state of Malaysia is proposing to convert the Sepanggar Bay Container Port into the Transshipment Hub of the East by 2030 to reduce the high costs of shipping goods from the peninsula to Sabah.
The Sabah Port Authority (SPA) presented the proposal to the federal government, citing it as a way to to improve the ratio between export and import activities at the port. At present, 80% of cargoes handled at the port are importations, with exports making up the rest.
Sabah Deputy Chief Minister Tan Sri Joseph Pairin Kitingan was quoted as saying that the huge imbalance is the main reason why the cost of sending shipments to Sabah is high.
Pairin, who is also Sabah Infrastructure Development Minister, added that even after the government has relaxed the cabotage policy to allow foreign carriers to call directly at any port in Sabah, they are dissuaded by the steep cost of shipping out from Sabah.
The problem is that it is not economically viable for these foreign shipping lines to come in as there is not enough cargo for them to ship out, Pairin said.
SPA and Sabah Port Sdn Bhd in their proposal is requesting the allocation of RM1.5 billion (US$412.4 million) from the budget for the 11th Malaysia Plan to bankroll the project, according to a report by Bernama, Malaysia’s national news agency.
Pairin said a study on the proposed project was ongoing and expected for completion this month.
He added that the state government, through the Economic Planning Unit and Sabah Economic Development and Investment Authority, had also agreed to and supported the proposal.
