Former Transport Minister, Anthony Loke, has questioned the Perikatan Nasional administration for removing the cabotage exemption for foreign-registered vessels performing undersea cable repairs in Malaysian waters. The cabotage exemption introduced by the Pakatan Harapan government in April 2019 is aimed at reducing time required to conduct repairs on undersea cables by nearly half.
The former minister asked the Transport Ministry what were its consideration to cancel the cabotage exemption policy for undersea cable maintenance and was it simply because it was introduced by the previous government? He also questioned whether the government has taken into consideration the demands of the local telecommunications and internet industries. The revocation took effect from the 13th November 2020 as gazetted in the Federal Gazette PU (B) 592 recently.
When the cabotage exemption was introduced, it was only granted to non-Malaysian vessels conducting undersea cable repairs while submarine cable laying, schedule maintenance and other activities remain under the cabotage. The previous administration continues to uphold the cabotage policy to protect and stimulate the domestic shipping industry. Cabotage is the right to operate and it was implemented in Malaysia since the 1980s to protect the local shipping industry from foreign competition.
The exemption for undersea cable repair vessels was introduced after it was requested by both Telekom Malaysia and Time dotCom with the support by the Ministry of Communications and Multimedia. According to a report by The Edge Markets last year, Anthony Loke told Parliament that Malaysia only has one vessel to carry out such undersea cable maintenance works.
It took an average of 27 days which wasn’t up to par and has a negative impact in attracting telecommunications and internet investors. As a comparison, undersea cable repairs are said to take 20 days in the Philippines, 19 days in Singapore and 12 days in Vietnam.
Because of this, he said undersea cables installed tend to avoid Malaysia and land in Singapore instead. With the exemption, Anthony said the previous government aims to increase Malaysia’s competitiveness in attracting foreign investors such as Facebook, Google and Amazon who wish to construct undersea cables as well as data centres.
He said Malaysia undergoes around 6 major repairs per year and if an undersea cable is damaged, it affects telecommunications and internet services. With the exemption, repairs can be done as quickly as possible if contractors’ licences and permit are issued without delay.
Commenting on the revocation of the cabotage exemption, the Malaysia Shipowners’ Association (MASA) thanked Transport Minister Datuk Dr Wee Ka Siong for the action. They added that the decision was done in the spirit of patriotism and “Malaysian First” agenda which is greatly appreciated for the development of the local shipping industry.
It also added that Optic Marine Group, a MASA member that provides subsea cable installation and maintenance is in the process of registering a cable laying vessel under Malaysian-flagged. MASA is optimistic and looking forward to see a Malaysian-flagged vessel to serve the nation through its excellent performance and track record with consistency, accuracy and cost effective techniques in the submarine cable industry.
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