Port users in Labuan island off Sabah coast are hopping mad at the escalating charges they claim a private port services company - appointed by a federal agency to manage port warehouses and container yard - is forcing them to pay.

They are also questioning the rights of the company, Labuan Liberty Port Management Sdn Bhd (LLPM) - a subsidiary company of the Labuan Malay Chamber of Commerce - to impose fees on port users at the New Liberty Wharf.

According to them, the privatisation of New Liberty Port has not been given the green light by the Economic Planning Unit in the Prime Minister's Department, or any other appropriate federal authorities.

Their complaints have led to the Anti-Corruption Agency (ACA) dispatching a team of investigators to Labuan last week to probe the matter.

'Ridiculous hike in fees'

Labuan port handles about 300,000 tonnes of cargo and about 600 vessels annually. The annual container throughput is about 20,000 twenty-foot-equivalent units, with imports consisting mainly of chemicals, food and drinks.

Shipowners and shipping agents pay landing fees to the Marine Department but LLPM imposes additional charges onshore, such as for cargo shifting, use of yard for stuffing/unstuffing, parking and equipment hire.

"To cite one example how ridiculous the charges are, for 'direct delivery' it used to be RM1 per box but now we are asked to pay as much as RM8!" one shipping agent lamented.

Port users are claiming that LLPM has taken advantage of the implementation in July last year of the International Code for the Security of Ships and Port Facilities (ISPS) to hike their charges and extend greater control over the port area.

"They don't even have scanner on site and do not bother to check the goods - it is obvious they are imposing the fees to collect money," a local importer said, adding that the port services there were "well below par".

An angry shipping agent, who asked not to be identified, told malaysiakini: "Labuan is supposed to be a duty-free port. Instead, it has become a heavy-duty port."

Escalating costs

The problem in Labuan port began in 1998 when the Federal Land Commission gave Labuan Malay Chamber of Commerce the right to collect fees.

The chamber in turn set up LLPM - a company headed by local politician Yusof Mohd - to operate warehouses and container yard in the port.

At the same time, former port operator Sabah Marine Department issued two port circulars Pekeliling Pelabuhan Bil 1/99 and Pekeliling Pelabuhan Bil 3/99 as guidelines for port charges or port tariff.

Many port users complained that LLPM hardly followed the charges stipulated in the guidelines, in addition to the "unsatisfactory handling services" provided by company.

A local businessman told malaysiakini that the Marine Department, after receiving feedback from port users, had advised the Federal Land Commission not to renew its agreement with LLPM when it was due to expire in 2002.

But the commission nevertheless signed a new three-year tripartite agreement with the Malay Chamber of Commerce and LLPM. This new agreement will expire on Dec 31, 2005.

The commission has also drawn up its own guidelines on port charges that it expected the port services company to adhere to, creating confusion among port users as to which tariff to follow - the Marine Department's or the commission's.

But to compound the problem, businesses in Labuan argued that the port services company did not even bothered to follow the new port charges.

"It has been raising port charges at its own whims and fancies," decried KS Pua of Seri Labuan Paper Products (S) Sdn Bhd.

Pua said Labuan businessmen had little choice but to pass on the extra cost to consumers in the island.

A shipping agent said: "Things are becoming expensive in Labuan and many people prefer to go to the mainland (Sabah) to shop for consumer goods."

ACA seizes files

Meanwhile, after Umno Labuan member of parliament Suhaili Abdul Rahman raised the matter in Parliament and called on the Anti-Corruption Agency to probe the 'privatisation' of the port services, an ACA team visited the Labuan port operations office last week and seized several files for investigation.

When addressing Parliament in October last year, Suhaili said that the benefits of Labuan being a free port would be gone if port charges were excessive as consumers would ultimately pay for higher living costs on the duty-free island.

A LLPM spokesperson said it welcomed the ACA probe, stressing that the company was doing "a good job" and that it had not breached any regulations.

The company also said its charges and services were all within the conditions as approved by the Marine Department.

In retaliation, LLPM had lodged a police report against the port users who submitted a joint petition to the island's sole MP, Suhaili. The firm said the petition contained "unfounded accusations".

Malaysiakini was unable to contact Labuan's marine director Ahmad Khairuddin Ismail for comment on the controversy as his office said he was in Putrajaya on official duties.

TONY THIEN is malaysiakini 's Sarawak-based stringer.