PUTRAJAYA, March 1 — The government has agreed to reinstate the cabotage policy exemption for foreign ships involved in submarine cable repair in a bid to attract more foreign investments in the data centre industry and stimulate the digital economy's growth.
Transport Minister Anthony Loke said the move was approved during a Cabinet meeting chaired by Prime Minister Datuk Seri Anwar Ibrahim today.
“The (waiver) decision follows various engagement sessions with international information technology giants over the last few months and is a testament to the Madani Government practising an investor-friendly policy,” he said during a press conference.
Malaysia introduced the cabotage policy to promote and develop a strong national ship-owning industry and reduce the country's dependence on foreign vessels and the outflow of foreign exchange in the form of freight payments.
Following the Cabinet’s decision today, the Transport Ministry will take the necessary steps for the gazetting process.
“The effective date for this exemption will be announced later,” Loke said, adding it is expected to take effect within two months.
Meanwhile, the Cabinet has also agreed to reimplement the cabotage policy for ships operating cargo services from the Peninsula to Sarawak.
This comes after the Sarawak government’s request to support the local shipping industry’s growth, which has been under pressure due to the cabotage policy exemption since June 1, 2017.
“The Sarawak government, in its feedback to the Transport Ministry, said the cabotage policy waiver has stunted the shipping industry’s growth, especially in Sarawak.
“Before the exemption, there were 12 Malaysian shipping companies active in providing cargo services, but in the last few years, only five active companies remain.
"Hence, the cabotage policy needs to be reinstated to help the local shipping sector’s growth, especially between the Peninsula and Sarawak,” he said.
However, the exemption of cabotage policy for vessels carrying out cargo services from the Peninsula to Sabah and Labuan will remain in line with the Sabah government’s stance.
— Bernama
