Maritime fund: Make it happen this time, say industry players

22 Sep 2019 / 17:01 H.

KUALA LUMPUR: The relaunch of the maritime fund by Finance Minister Lim Guan Eng with a value of RM1.5 billion is a good first step to revitalise the industry, but a clearer and firmer process of the fund application must be made visible this time around, industry players said.

Malaysian Shipowners Association chairman Datuk Abdul Hak Md Amin told Bernama that successful applicants would enjoy a financing rate subsidy of 1.75% per annum and this bodes well with the current challenging environment faced by local players.

“We welcome this announcement, RM1.5 billion worth of fund is a good boost to the industry, and for the higher financing rate subsidy, we view it as positive news although Malaysian shipowners still have to live with higher interest rates compared to their counterparts in Singapore,“ he added.

The fund is available until Dec 31, 2020, or upon full utilisation, whichever is earlier and applicants may utilise the funds to part-finance acquisition of all types of vessel or aircraft, the purchase of land, the construction of shipyard, hangar or related infrastructure.

On the disbursement of the fund, Abdul Hak stressed that the fund, managed by Bank Pembangunan Malaysia Bhd, should be easily accessible to applicants.

“They should not make the loan approval difficult for deserving shipowners, and the criteria set forth should not be unrealistic for borrowers to fulfil. We understand that banks have their own risks, but they shouldn’t make it hard for applicants,“ he said, adding that with the subsidised interest, the net rate must be less than that imposed by commercial banks.

Meanwhile, Muhibbah Marine Engineering Sdn Bhd (MMESB) director Ooi Kien Chuan said as a shipyard operator he hoped the fund would entice local players to build ships locally.

“We hope more ships will be built locally rather than in China. Malaysian shipyards offer competitive prices, and we can say that prices of ships made in China are not that cheap anymore,“ he said.

Ooi also urged the government to look deeper into policies related to the maritime industry to be in sync with the maritime fund.

“We may have financial assistance and policies, but both are not aligned, we have funds, but all of the shipowners go abroad to buy ships, it is not benefiting the local shipyards,“ he said.

To sum up, industry players opined that the establishment of a shipping fund is long overdue and needs to be looked into with urgency to help the local players survive and for the shipping industry to flourish at the same pace as other industries in Malaysia.

In Budget 2014, the government formulated the Logistics Sector Master Plan, which provided the strategic direction for the development of logistics infrastructure and supply chain, as well as, review of regulations and laws.

Under the plan, RM3 billion in soft loans were allocated under the Maritime Development Fund, through Bank Pembangunan Malaysia, to help the industry grow. — Bernama

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