Ex Minister Why Exemption To Speed Up Internet Cable Repair Quietly Revoked

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PARLIAMENT | Former transport minister Anthony Loke (DAP-Seremban) questioned the government’s move to revoke an exemption in the nation’s cabotage policy that was meant to expedite the repair of undersea cables that connect Malaysia’s internet infrastructure to the rest of the world.

He said he granted the exemption effective April 1 last year after being urged by internet industry players, including government-linked companies, and also after consulting transport ministry officials and their counterparts at the Communications and Multimedia Ministry.
However, he said his successor Wee Ka Siong had quietly revoked the exemption. The revocation was gazetted on Nov 13 and came into effect on Nov 15.

“I wish to ask the Transport Ministry, what were the government’s considerations in cancelling the exemption in the cabotage policy for cable repair work beginning Nov 13 as gazetted in PU (B) 592 recently?

“Were the views and requests from the local telecommunications and internet industry taken into account? Was priority given to Malaysia’s interest in building an internet industry in the era of the fourth industrial revolution?" Loke (above) asked.
The DAP national organising secretary asked why Wee had seemingly made a unilateral decision without taking into account the concerns of the Communications and Multimedia Industry, the Science, Technology, and Innovation Ministry, the International Trade and Industry Minister, and others.
He questioned why Wee had made such an important policy change quietly without any public statements to explain why the Transport Ministry made a U-turn on the cabotage exemption which, he said, was well-received by the industry in 2019.
Loke was speaking during the debate session of Budget 2021 in the Dewan Rakyat today.

The cabotage policy is a protectionist policy intended to maintain Malaysia’s shipping and shipbuilding industries and thereby reducing dependence on foreign shipping.

Under the policy, only a Malaysian-registered and owned vessel may ply domestic shipping routes in Malaysia unless an exemption is granted.

The policy had been blamed for higher prices of goods in Sabah and Sarawak compared to Peninsular Malaysia, since goods would have to be transhipped through Port Klang before being delivered to the two states.
Loke said he granted the exemption to give Malaysia an edge in the lucrative data centre industry as technology companies pour billions of dollars annually to set up data centres at strategic locations connected by submarine cables.
According to the website submarinecablemap.com, Malaysia is currently connected to 22 submarine cable networks (photo) with landing points in places like Mersing in Johor, Kuantan in Pahang, and Malacca.

Loke said Singapore is often the favoured option for submarine cable landings and regional data centres due to its strategic location and government incentives, but Malaysia still has an advantage in terms of lower land and operating costs, and an even better location.


“However, a factor that has become our weakness is the cabotage policy that has caused delays in repair works when submarine cables are damaged in Malaysian waters.

“When the cables are damaged, it could take more than a month before repair works could even begin,” he said.

He also quoted a 2016 report by the International Cable Protection Committee stating Malaysia’s repair performance is unsatisfactory with an average lead time of 20 days.

During a visit by industry representatives late last year, Loke said he was informed that there are only 60 vessels capable of undertaking the repair works, and none of them are Malaysian-flagged.

He quoted a report by internet industry consulting firm Analysis Mason saying that it is also impractical for each country to have its own submarine cable repair ships, as these are highly-specialised vessels and the utilisation rate would be low if it could only serve one economy.

“I am satisfied that it is reasonable to grant the request for more leeway for submarine cable repair ships and it would have a minimum business impact for the local shipping industry.

“For information, no Malaysian vessel fulfils the technical criteria to undertake submarine cable repairs – this fact was presented by Malaysian telecommunications companies including TM and was supported by the Communications and Multimedia Ministry,” he said.

He emphasised that the exemption only applies to repair works, as the installation of new cables is not deemed urgent and would still be subject to the cabotage policy.

He added that the exemption was well-received by industry players as it would cut the lead time for repairs by at least 14 days.

Several international technology companies have even decided to invest billions of ringgit to lay new submarine cables that would land in Malaysia and set up new data centres in the country, he said. - Mkini

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