Logistics and transport as the catalyst for economic development in Sabah

Our prime minister had made a very important statement regarding the East Coat Rail Link  (ECLR) for the East Coast states in Peninsula Malaysia in that it is a mean to close the gap between the varying development progress between the regions in the country especially between the East and West coast of peninsula Malaysia. So transportation is a critical factor in ensuring development of economic activities. With the implementation of the ECLR the gross domestic product (GDP) of the three east coast states is projected to grow by 1.5%. It will change the economic landscape of Kelantan, Terengganu and Pahang turning them into trade hubs, tourism destinations and new investment focus. It is a game changer that would spur higher growth.

By the same token, Sabah has a mega transport project that would be a game changer for Sabah and that is the Pan Borneo Highway to improve connectivities and spur development along the highways in the hope that it would be a catalyst for economic  activities, especially in manufacturing to take place.

In addition, the construction of the East Coast Rail Line (ECRL) for Sabah's East Coast can change the landscape of Sabah's east coast with the opening up of the district’s economy through rail access.

The same goes for the construction of rail lines in terms of commuter rail service to serve Kota Kinabalu and its suburban districts. A good linkage between Sapangar Bay Port (SBP) and the Kota Kinabalu Industrial Park (KKIP) is an absolute must if we want to see SBP as a new kid on the block in transhipment makes the impact that it had been hoped for. It is however well noted that a tunnel had been dug to provide for a shorter access to the KKIP to make way for faster and cheaper cargo transportation from Sapangar Port to the KKIP. KKIP is an important landside depot as it helps the port to quickly clear space in the port area thereby avoiding congestion of operation within the port.

The creation of a superior port must be supported by a host of related industries and activities and that one cannot wait for the other to exist before it is started. It has to be in tandem so that it would create the lure for investors yearn for bringing in the much needed activities to generate its industries.

Planning is a total and holistic approach to ensure that critical industries and sectors are served.  Investors will look at what is the current status of the economy of Sabah, re the concrete plans that had been approved to make the plan happen. Only then will investor be happy to commit investing in Sabah.

Take for example the palm oil industry. It is a huge business where Sabah produces about 40% of the nation's output but Sabah cannot take advantage of this in developing down streaming of activities of this industry. Since there is no manufacturing activities that will be generated, our logistics industry will also suffer with no land transportation activities to be seen and thereby no port container operation taking place. We are missing on the spectrum of pushing our economic activities to a greater height by not down streaming the palm oil industry.

We use to say that in the transport and logistics sector planning must precede the demand and therefore the supply of the infrastructure must be made available first so that it will generate traffic. There are many a time that activities will only happen when they see that there are facilities available for them to plan and suit their needs and activities.

So in general it is a question of the hen or the egg first. Government would have to be strong in committing to creating an environment that will create a conducive window for development. Such planning frame does not happen here as the budgetary constraints will always be for the obvious necessities but not those that is a future necessity which if done now could make for great savings in cost rather than wait for the time when it is to be implemented at an exhorbitant cost but has to be implemented as it has become a critical need.

Railway is expensive. That is why rail planning must have a parallel development strategy. It has to be measured by the performance of other competitive modes such as road and air. In our case, it therefore requires not only careful planning but also has to be accompanied by long-term strategic policies that will reverse the domination of the road transport sector. We have definitely been road- or highway-biased, preferring to invest heavily on highways and focus more on cars as a mode of transport.

It is therefore quite refreshing when a leader, in reference to our Prime Minister on the development of the East Coast Rail Line, touches on the importance of rail and how it can play a significant role in the future transport sector. A rail system, for its rigidity and fixed route, needs to have other supporting infrastructure that will make it work. With the right support and connectivity, it can, after all, be made to be more efficient than road transport.

Since it can also accommodate more traffic (freight and passengers), a well-planned railway, of an appropriate design, speed and technology, can outperform road mode in terms of better travel time and capacity. It is, after all, a cheaper mode of transport and less polluted.

Planners must incorporate the need to connect the existing network with a new rail network, so that connectivity can be enhanced and the future network expanded.

This is strategic planning for the transport and logistics sector, a statement that  we often find missing and definitely lacking in many transport project planning documents or blue prints.

We are also hoping that projects developed and harnessed under the Sabah Development Corridor (SDC) would all be successful so that it will add to the economic well being of the state. Logistics being one of the pillar in transforming Sabah’s economy in the context of the SDC would provide for a seamless impetus and kickstarts to many projects that is being undertaken privately. Only when state development plans like the SDC is well in placed woul eventually spur investments and development coming into the state.