MoT urged to reinstate cabotage exemption


THE Social and Economic Research Initiative (SERI) has urged the Ministry of Transport (MoT) to engage with stakeholders to reinstate the cabotage exemption and create an environment that enables digital infrastructure investment.

Facebook Inc recently announced plans to lay two new undersea cables, Echo and Bifrost, connecting Singapore and Indonesia with North America in a partnership with regional telecommunication companies and Google LLC.

The plan, however, excluded Malaysia with many claiming it was due to the current government’s reimposition of the cabotage policy on submarine cable repair works which impacted Malaysia’s appeal as an investment destination.

“The decision to exclude Malaysia for the cable landings of Echo and Bifrost does not bode well for our digital economy ambitions, especially given the Malaysia Digital Economy Blueprint’s aim for Malaysia to have the highest number of submarine cables landing in South-East Asia by 2025.

“According to the blueprint, efforts to achieve higher investment in the digital economy and more reliable and high-speed Internet connectivity are being led by the Ministry of Communications and Multimedia. However, the national cabotage policy falls within the purview of the MoT.

“There is a need and an opportunity for greater collaboration between the relevant ministries if we are to fulfil the goals of the blueprint,” SERI, a think-tank based in Penang, said in a statement yesterday.

Transport Minister Datuk Seri Dr Wee Ka Siong (picture) earlier denied that Malaysia was exempted from the plan due to cabotage policy.

SERI said the justification was inconsistent with the government’s blueprint to provide conditional approval to four cloud service providers intending to develop hyper-scale data centres and cloud services in Malaysia.

“Our participation in the global digital economy is dependent on the health and resilience of our digital talent and digital infrastructure. Protectionist or monopolistic measures will not serve us well,” it said.

The previous Pakatan Harapan government approved the exemption of cabotage on foreign vessels in 2019 to allow foreign vessels to perform undersea cable maintenance in Malaysian waters from April 1 that year.

The exemption was then revoked by the MoT in November last year.

Echo and Bifrost are in the process of receiving domestic regulatory approval and are scheduled to be completed in 2023 and 2024 respectively.