Transport Ministry proposes maritime development fund to continue in Budget 2024

Transport Ministry proposes maritime development fund to continue in Budget 2024

KUALA LUMPUR, Sept 5 — The Ministry of Transport (MOT) has proposed that the loan fund provided to domestic shipping company operators be continued in Budget 2024, which will be tabled next month.

Minister Anthony Loke Siew Fook said the maritime sector development was emphasised, particularly on the environmental-friendly agenda, during the ministry’s Budget 2024 consultation session with the Ministry of Finance.

“The maritime sector was given attention in the consultation and we wanted the government to establish a loan fund under Bank Pembangunan Malaysia Bhd for companies and domestic shipping operators to move towards the ownership of environmental-friendly vessels.

“Local vessels must reduce greenhouse gas emissions to achieve carbon neutrality and to move in that direction, they need funds to carry out modifications of existing ship engines, requiring large capital investment,” he told reporters after launching the Global Shippers Roundtable today.

The roundtable was organised by the Malaysian National Shippers’ Council and Malaysia Productivity Council with the theme “Navigating the Waves of Unpredictability: Building Shippers’ Resilience for the Next Normal”.

Loke also said that modifications of existing ship engines are very important and in line with the demand of the world market which requires ships and cargo to be environmentally friendly and not polluting the environment.

The Federation of Malaysian Manufacturers president Tan Sri Soh Thian Lai said the requirement to compete in the international markets has changed significantly over the past few years and buyers no longer base their decisions solely on price.

He said policymakers, numerous stakeholders and consumers now have different expectations and are more concerned about the significance of adopting sustainability measures.

“Worldwide, shippers must invest in developing sustainable export strategies that promote and adopt environmental, social and governance principles in their production process and global supply chains.

He said shippers would need relevant certifications, standards, labelling and global endorsement in order to compete on a global scale, especially in high-value markets.

“To do this, we must work concertedly to make sure that trade policies are adaptable to meet these developments.

“We must also develop capacity-building programmes to fully realise our potential in the rapidly evolving global trade environment,” he said in his speech at the same event.

In Budget 2023, the government provided the Maritime and Logistics Financing Scheme Incentive worth RM1 billion to bolster the growth of the country’s maritime industry which needed a lot of support.

Minister of Finance Tengku Datuk Seri Zafrul Abdul Aziz announced that the fund, which aimed to revitalise and restore the shipping industry, would also be extended to the oil and gas supporting industries as well as the shipbuilding and repair sector.

In November 2020, Budget 2021 extended the Maritime and Logistics Development Scheme, the Sustainable Development Financing Scheme, the Tourism Infrastructure Scheme and the Public Transport Fund until Dec 31, 2023 with a fund size of RM3.7 billion.

Prior to that, the government re-launched the Maritime Fund (MF 2.0) worth RM1.5 billion via Bank Pembangunan Malaysia Bhd to inject modernisation into the country’s maritime sector in 2019.