A Vision for Logistics (Part 4)
KOTA KINABALU: Sarawak’s transformative approach to logistics and transportation—exemplified by its Integrated Transport Master Plan 2025–2040 and renewable energy-driven Sarawak Corridor of Renewable Energy (SCORE)—offers a compelling model for Sabah to adapt and refine. By leveraging strategic planning, multi-modal integration, and sustainability, Sabah can position itself as a logistics powerhouse in Southeast Asia. This refined blueprint outlines how Sabah can mirror Sarawak’s success while addressing its unique geographical, economic, and social contexts.
Adopting a comprehensive, data-driven transport master plan
Sarawak’s Integrated Transport Master Plan 2025–2040 consolidates fragmented efforts into a unified strategy, addressing land, maritime, air, and riverine transport through a comprehensive framework developed with over 20,000 manhours of stakeholder engagement. Sabah must similarly develop a Sabah Integrated Logistics and Transport Master Plan (SILTMP), anchored on three critical pillars.
Multi-modal integration
Prioritising seamless connectivity between key nodes like the Sapangar Bay Container Port, the Sabah State Railway, and rural road networks is critical for reducing transport inefficiencies. Sarawak’s Kuching Urban Transport System (KUTS), which integrates autonomous rail transit with pedestrian-friendly spaces and transit-oriented development, demonstrates how synchronised systems reduce congestion and boost efficiency. For Sabah, aligning port operations with rail upgrades could significantly improve cargo flow, as the Sapangar Bay Container Port is currently expanding its capacity from 500,000 TEUs to 1.25 million TEUs by 2025 through its partnership with DP World.
The Sabah State Railway, which has undergone modernisation with new diesel multiple units and improved track infrastructure, presents opportunities for enhanced cargo movement when integrated with port operations. Strategic alignment of these systems could reduce cargo dwell times and transportation costs, particularly given that transport costs in Sabah are 30-50% higher than in Peninsular Malaysia.
Climate resilience
Sarawak’s SCORE initiative has achieved remarkable success, with 66% of power generation currently renewable and expectations to reach 73% upon completion of the Baleh Hydroelectric Project in 2028. Sabah must adopt similar climate-resilient standards, including elevating port facilities and constructing flood-resistant highways. The integration of solar-powered micro-hubs in agricultural districts like Keningau could reduce post-harvest losses while enhancing rural resilience, following the model of Sarawak’s Batang Ai Floating Solar Farm, which offsets 52 kilotonnes of CO₂ annually.
Modernising strategic infrastructure nodes
Sarawak’s infrastructure modernisation, including the Miri Port expansion with plans for deep-sea development off the Kuala Baram delta to accommodate larger vessels in 50-metre-deep waters, exemplifies strategic port development. Sabah’s strategy should focus on similar ambitious improvements.
Port enhancement: Dredging Sapangar Bay to accommodate larger vessels would eliminate costly transhipment surcharges and improve efficiency. Coupled with AI-driven cargo optimisation and the planned cold storage facilities, this could significantly reduce logistics costs and improve supply chain efficiency.
Rural connectivity: Establishing solar-powered cold chain facilities in agricultural centres like Tenom and Keningau would integrate rural producers into global supply chains while reducing post-harvest losses. The restoration of water taxi networks between coastal communities using biodiesel-powered vessels could dramatically reduce transport costs for island communities, following Sarawak’s focus on riverine transport development.
Strengthening governance and stakeholder collaboration
Sarawak’s dedicated Transport Ministry and SCORE’s governance frameworks ensure accountability and efficient project execution. Sabah must implement similar institutional reforms.
The Chartered Institute of Logistics and Transport Malaysia (CILTM) Sabah Section has called for the establishment of a dedicated Ministry of Transport in Sabah, emphasising the critical role of logistics in driving economic growth. This ministry would centralise accountability and drive integrated planning, ensuring all transport modes are developed in a coordinated manner while aligning state initiatives with federal policies.
The Sabah Logistics Council, established in June 2024, has brought together stakeholders from ports, local councils, freight operators, academia, and government agencies. Upgrading this council to a statutory body with enforcement authority would prevent project delays and ensure cohesive execution of the SILTMP, similar to how Sarawak’s institutional framework operates.
Leveraging public-private partnerships
Sarawak’s Build-Lease-Maintain-Transfer (BLMT) model for infrastructure projects mobilises private capital while ensuring quality maintenance. Implementing similar PPP models for projects like the Kota Kinabalu–Ranau Highway upgrade could attract significant private investment, helping address infrastructure funding gaps. The Pan Borneo Highway Sabah project, with Phase 1A at 81.7% completion and Phase 1B at 3.06% completion, demonstrates both progress and the need for accelerated implementation.
Embracing sustainability and digital innovation
Sarawak’s Post-COVID-19 Development Strategy 2030 (PCDS 2030) prioritises renewable energy and digitalisation, achieving 62% renewable energy in its capacity mix and surpassing its 60% target for 2030. Sabah’s approach should include
Renewable energy integration
Transitioning Sapangar Bay’s equipment to electric power, supported by solar farms in the Interior Division, could achieve substantial renewable energy usage by 2030. The Baleh Hydroelectric Project in Sarawak, a 1,285MW facility scheduled for completion by 2028, highlights the potential of large-scale renewable energy systems.
Digital innovation and human capital development
Implementing predictive analytics for cargo routing at Sapangar Bay would optimise supply chains and reduce costs. Partnering with Universiti Malaysia Sabah (UMS) to create a Logistics Innovation Hub could bridge the technology gap with Peninsular Malaysia. Sarawak’s focus on human capital under PCDS 2030, including training programmes for green technology, provides a proven template for workforce development.
Green financing mechanisms
Installing solar-powered stations along the Pan-Borneo Highway, incentivised by tax breaks through mechanisms like the Green Investment Tax Allowance (GITA), would support Sabah’s transition to electric fleets. The GITA framework provides tax incentives for renewable energy projects, including wind energy, solar, and green hydrogen initiatives.
Enhancing cross-border connectivity
Deepening ties with Brunei and Indonesia under the BIMP-EAGA framework could revive regional connectivity and reduce shipping costs. The BIMP-EAGA cooperation mechanism aims to mobilise private sector investments and reduce development disparities across the sub-region, presenting opportunities for enhanced trade connectivity and reduced logistics costs.
Overcoming implementation challenges
Legislating statutory authority for the enhanced Sabah Logistics Council to override conflicting federal-state directives would prevent project delays and ensure cohesive execution of the SILTMP. This institutional reform, combined with the establishment of a dedicated transport ministry, would address the fragmented approach that has hindered infrastructure development.
Climate resilience planning
Mainstreaming climate stress tests for all projects, similar to Sarawak’s SCORE framework, would safeguard coastal infrastructure from climate risks. Given Sabah’s extensive coastline and vulnerability to climate change, this proactive approach is essential for long-term infrastructure sustainability.
Conclusion: A call for coordinated action
Sarawak’s progress stems from bold leadership, cohesive planning, and sustained execution, as demonstrated by its achievement of high-income status and consistent revenue growth. For Sabah, the path forward demands immediate action on multiple fronts: Immediate Adoption of the SILTMP with dedicated funding for Phase 1 (2025–2030); Institutional Reform through the establishment of a Transport Ministry and statutory empowerment of the Sabah Logistics Council; Private Sector Engagement through expanded PPPs to unlock significant private investment; Regional Integration through enhanced BIMP-EAGA cooperation and cross-border connectivity.
The transportation and storage sub-sector in Malaysia demonstrated 11% growth in 2024, highlighting the sector’s vital role in economic development. By emulating Sarawak’s visionary governance while tailoring solutions to its unique assets—strategic ports, renewable energy potential, and ASEAN proximity—Sabah can transform its logistics landscape. The comprehensive approach outlined in this blueprint, combining institutional reform, infrastructure modernisation, and sustainable development, provides a roadmap for Sabah to emerge as a regional logistics powerhouse while ensuring inclusive and sustainable growth for all communities.
