New Funding Needed for Malaysia's Maritime Sector

The local maritime industry needs additional funding as the New Shipping Financing Fund (NSFF) will soon be exhausted. Total loans dispensed under the RM1 billion NSFF have reached RM914.2 million. The money was used to buy 58 vessels, of which eight were tankers, nine container ships, nine cargo ships, 20 offshore support vessels, 11 tugboats and one barge.

Bank Pembangunan Malaysia Bhd's vice president and head of maritime business development and advisory, Norulhadi Md Sahariff, said the bank provided about RM641 million in loans last year alone because of increased offshore activities and the International Maritime Organisation (IMO) requirement that all single-hull tankers be replaced with double-hull.

In 2001, the Government allocated RM1 billion to further develop the shipping and shipyard industries. The fund was aimed at further stimulating growth of these two industries to transform Malaysia into a maritime nation. The NSFF is managed by Bank Pembangunan, which is owned by the Minister of Finance Inc. This was after a RM1.3 billion fund, the Malaysian Shipping Finance Fund, was given in 1993, which was fully disbursed.

Of the loans approved for the maritime sector from 1999 to 2006, RM1.4 billion was approved for 281 ships. No loans were approved for shipyard and maritime-related activities. Industry players said the sector needs at least another RM2 billion allocation to achieve the objective of making Malaysia a significant maritime nation. Marine Department director-general Captain Ahmad Othman, who spoke at the conference, said the Government is thinking of allocating a further RM300 million to help increase the number of double-hull tankers to carry palm oil out of the country. There is currently a shortage of Malaysian-owned double-hull tankers to transport palm oil. Source: Business Times