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  28th Nov 2011 - STAR MARITIME

Malaysia can become regional leader with better supporting infrastructure and incentives

KUALA LUMPUR: Malaysia has the potential of becoming a regional champion in maritime industry if efforts to improve its supporting infrastructure and incentives are given more focus by the Government.

Malaysian Maritime Institute’s (Ikmal) new president Datuk Abd Hak Md Amin said Malaysia had world-class facilities such as airports, hotels, road networks and modern ports but shipowners still preferred to go to Singapore for their crew change or stock-up provisions, refuel and others.

“The crew change for ships in Malaysia and Singapore alone ran into more than a million crew annually, but 95% of this crew change take place in Singapore,” he told StarBiz in an interview at Ikmal new headquarters in Setiawangsa.

“This activity contributed significantly to the economy of the republic because they use airport, hotels, transport facilities (air, land and sea) and entertainment outlets during their few days’ stay while waiting for the ships or to be repatriated back to their home countries.

“Singapore makes the immigration, custom and port clearance processes for ships calling at its port as hassle-free as possible. We need to emulate some of the good things that benefit the shipowners.

“For example, crew-change process that involves immigration clearance should be simpler.

“In certain countries, online advance immigration clearance could be done without requiring physical attendance of the seafarers.

“Another example is “spares in transit” which sometime put off the shipowners using Malaysian airport as transit point because of the bureaucracy.”

Hak said more support should be given to the local shipbuilding industry which would in turn create a lot of economic spin-offs.

The shipbuilding industry in Malaysia, he said, was “neither here nor there”.

“For example, the shipbuilding industry in Japan, South Korea and China would not have flourished without strong support from their governments especially in the initial stages.

“In Japan and South Korea, their governments supported the industry via giving a lot of shipbuilding contracts to new shipbuilders.

“They also encourage their shipping companies to build their ships locally by giving incentives like soft loan or grants. After seven to 10 years of usage, the ship must be sold to other foreign owners like Malaysians, Indonesians or Africans so that they could continue to order new ships from their shipbuilders, and the cycle continues,” he said.

This way the supporting industries like the designers, and engine and equipment makers will also flourish. There is also the element of sustainability in the industry.

Hak said the issue of piracy had also recently re-surfaced in this part of the region.

The Strait of Malacca was identified as a piracy hot spot prior to 2006 until there were dramatic improvements owing to the three littoral states’ effort.

The strait was removed from a war-risk zone list in 2006.

“Piracy is becoming a menace again especially around Batam and South China Sea areas, according to complaints by our members. Although it does not involve serious crimes like hijacking or vessels or kidnapping of crew, the pirates there have boarded ships and stolen the belongings of the crew.

“If this continues, it will dampen the spirit of the crew and could lead to more serious crimes later on. Fortunately, we have a world-class navy and coastguard that we can depend on to safeguard our waters,” he said.

On the current state of the maritime industry, Hak said obviously it was in a downturn where in Malaysia several shipping companies had ceased operations.

“Even the biggest shipping company, Maersk was reported to record a loss this year and at home, the third-quarter result for Maybulk dipped by 99%,” he said.

According to Hak, if the downturn persists, it will affect the country’s maritime graduates’ employment opportunities.

“Thousands of maritime-related graduates are being produced annually and if nothing is done to spur the growth of the industry, it will become a problem. For example, something should be done to support the growth of our shipbuilding industry as I earlier mentioned.

“Furthermore, the recent proposal to reduce income tax exemption for shipping firms to 70% of statutory income from next year, versus 100% currently, will further impede the investment and expansion for this industry.

“Most countries worldwide do not impose tax on shipping companies as they are one of the main trade facilitators and Malaysia is ultimately a trading nation,” he said.

Hak said currently Malaysian Shipowners Association (Masa) was talking to the Finance Ministry on that matter and Ikmal would give it full support to Masa.

On his appointment as the president of IKMAL, Hak was proud that he was the first marine engineer to helm the institute.


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