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PUTRAJAYA: The Malaysian Shipowners Association (MASA) today expressed hope that the recent government revocation of the cabotage exemption for foreign-flagged vessels repairing submarine cables is a long-term policy.
Masa President Abdul Hak Md Amin told FMT that he would help locals develop their skills and stimulate competition.
You don’t want the decision to be changed again. “Nobody will invest if there are policy changes. Investors will want to be here for the next 20 years if the policies are good (and) I think the government understands that now. The minister is very positive and wants us to develop our own capacities, ”he added in the MASA office here.
The cabotage exemption for foreign vessels repairing submarine cables was granted in April 2019 by former transport minister Loke Siew Fook after a request from telecommunications companies such as TIME dotCom Bhd and Telekom Malaysia Bhd.
The exemption, which was revoked on November 15, previously allowed foreign companies and vessels to carry out repair work on submarine cables without the need to apply for a domestic shipping license exemption.
Hak said the exemption had a counterproductive effect by stimulating competition as all the repairs under the cabotage exemption were carried out by a single Singaporean company. Hak added that Malaysia’s cabotage policies were also practiced in 91 other countries.
Malaysia currently has a company with the capacity to carry out submarine cable repair work. However, foreign vessels can carry out undersea cable repairs if a situation arises where local vessels are too far from the area in need of maintenance.
“In the industry, the cabotage policy has no impact on the price of repairs, as repairs are governed by maintenance zones,” Hak said.
“What is driving prices is competition between the zones and we believe the current revocation will help stimulate this competition.”
