SABAH PORTS AMBITIONS

The plans are not just about expanding port facilities, but to become a key hub within the BIMP-EAGA (Brunei Indonesia Malaysia Philippines East ASEAN Growth Region) area. Sabah Ports, who own SBCT, believes increasing intra-Asian, and especially intra-ASEAN, trade will support SBCT’s expansion and reprofiling, both as a hub and longer term as a transhipment centre, which will, in-turn, help develop the region. Sabah, the northernmost province of the Malaysian part of the island of Borneo, has always lagged behind peninsula Malaysia in economic terms. The same can be said of one of the countries it borders – Indonesia – as well as the nearby Philippines.

CONNECTIVITY CHALLENGE

“We are putting forward Sapangar as one of the options for this connectivity challenge we are facing in this region,” Siti Noraishah Azizam, General Manager of Sabah Ports, which manages all the ports in Sabah, told the Conference.

SBCT has already been endorsed for gateway status by the BIMP Economic Business Council and, to date, the Malaysian government had supported Sabah Ports’ supply driven strategy.

Helping is Sapangar’s location. Nearby resources of agricultural, aquaculture and minerals are waiting to be tapped but need facilities to be moved – something that Sabah Ports sees as the start of a much bigger transshipment role. “We are strategically located at the centre of ASEAN,” said Siti, pointing out its closeness to three seas – the South China, the Celebes and the Sulu.

The port itself is sheltered, with a wide access channel and a possible 25m draft, said Siti. It is also only 15 hours at 15 knots or what she termed the minimal diversion time from the international shipping lanes. There is also room to expand. “We still have ample capacity to be filled in,” Siti said.

The first step of Sapanagar’s plan is to become a gateway. It is working, courtesy of a government grant, to increase its TEU capacity to 1.1 million TEU by 2023 and then to 2.43 million TEU by 2036. These are a big increase from the current container throughput of 379,000. Sabah Ports company moved 34.1 million tons in 2019, of which 16 million tons was palm oil.

INLAND DRY PORT

Sabah Ports is also working on developing an Inland Dry Port and a halal logistics chain whilst the government builds roads connecting all the industrial clusters in the province. Sabah Ports is open to other investors on these and other projects. “We cannot work alone,” Siti said.

Yet the expansion is not just about infrastructure in Sapangar which is only the first step to serve its own immediate hinterland – Sabah Province. Second would be North Borneo before the third, being a regional transhipment centre seeing it move cargo brought in from Indonesian and Philippines ports.

“We need a gateway,” Siti said. “With our capacity we hope we can have all this consolidation of cargo to tranship.”

SUPPLY CHAIN VULNERABILITY

Some issues still need to be tackled. One is the vulnerability of a supply side strategy, especially given political flux in the Malaysian capital Kuala Lumpur and the lack of obvious support from the Indonesian and Philippines governments.

“Maybe not now” counseled Datuk Roselan Johar Mohammed, Chairman of the BIMP-EAGA Business Council who suggested pushing the start date back to 2025 given the limited intra-ASEAN trade there is currently. “We cannot jump-start the economic process,” he told the Conference.

Not helping is that some of the countries in the region are sensitive about the export of what they regard as their mineral resources and have moved to limit them. AN example is Indonesia with its recent nickel export ban – a poor precedent for the ferronickel and zircon sands in Sulawesi that Sapangar could move.