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Exploring the Malaysian Cabotage Policy and Bunkering Industry

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Cdr Ang Chin Hup (R) presenting the reports to the Ministry of Transport via Microsoft Teams

The Centre for Maritime Economics and Industries (MEI) had completed two research projects in four consecutive months.

Beginning in July 2020 and ending October 2020, the centre produced two reports from the research. The first was entitled, “Issues and Prospect of Bunkering Industry in Malaysia” and the second, “Assessment: Effectiveness of the Cabotage Policy Liberalisation in East Malaysia”. The projects were awarded to MIMA by the Ministry of Transport (MOT) via MEI, as the centre with the focus on maritime economics.

Both projects were led by Senior Researcher Cdr Ang Chin Hup (R) and researchers from MEI, alongside external consultants. Dr Siti Ayu Jalil from the Malaysia Institute of Transport (MITRANS) joined the project as an Economic Consultant, and Dr Rawindaran Nair from Cardiff University joined as Project Advisor.

The Malaysian bunkering industry has a real potential for expansion because of the large number of vessels sailing through the Straits of Malacca. However, due to issues, challenges, and competition with Singapore, the industry has been struggling. It is hoped that MEI's research report will provide solutions to improve the bunkering industry in Malaysia. The research had focused on three key aspects: legislative, commercial, and operational issues. These issues were investigated in six locations, namely Johor Bahru, Klang, Penang, Kuching, the Federal Territory of Labuan, and Kota Kinabalu.

Meanwhile, the cabotage policy research was focused on the impact of the liberalisation of the policy in Sabah, Sarawak, and the Federal Territory of Labuan. MOT had perceived opposing views on the liberalisation from Sabah and Sarawak since its implementation on 1 June 2017 and thus commissioned MEI to research the impact of the policy. Cabotage is said to have a significant impact on the prices of goods and the cost of living. Therefore, the study had focused on those aspects, including the impact of COVID-19 on the price of goods and the cost of living.

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The attendees focusing on the presentation

MIMA recommended to the Ministry of Transport to strengthen the cabotage policy and support the bunkering industry in revitalising the maritime industry in Malaysia. These reports were finalised on 10 November 2020 and formally submitted through a virtual presentation. The 4-hour presentation was chaired by the Maritime Division Undersecretary Capt. Mohamad Halim Ahmed, and attended by MIMA Director-General Datuk Dr Sabirin Ja’afar, MEI researchers, and representatives from MOT and the Malaysian Shipowners' Association (MASA).

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