National Conference on Economic Corridors:

Challenges and Prospects

CONNECTING SABAH (AS LOGISTICS & TRANSHIPMENT HUB FOR ASEAN)

30 Jan 2018

Objective

2

Sapangar Bay Container Port

Liners from north

Liners from south

Legend

Sabah is geographically located right at the center of ASEAN and easily accessed by air & sea from 13 Global destinations making Sabah an ideal location for trade facilitation in the region especially to the untapped economics in East ASEAN and BIMP-EAGA Sub-Region.

Position SABAH as a Regional Transshipment for ASEAN and to establish a platform of plugging into the fast growing markets in China, Korean & Japan.

To improve Global Competitiveness by providing supporting infrastructure for Direct Connectivity to and from international market.

Sarawak

Sabah Peninsular Malaysia

Port Klang

Sapangar Bay Container Port

Sea - No International Port for Direct Shipment

Direct-Calls

Feeder Shipment

Legend

3

Challenges – Lack of Efficient Logistic Infrastructures & Supports

Sarawak

Sabah KLIA

Kota Kinabalu Int. Airport

Air - No International Air Freight Logistic Hub

Direct Flight

Feeder Flight

Legend

Sabah

Kota Kinabalu

Kimanis

Sipidang

Lok kawi Sandakan

Lahad Datu

Tawau

Kudat

Inter Land - No Highway / Rail Connectivity to Major Cities, Towns & Industrial Estates

Internet – Slow Speed

~2 to 30 Mbs

> 200 Mbs

Sabah

High Logistic & Operation Cost and Lack of Efficient connectivity to International Markets remains the Critical Factor Affecting FDI & Economic Development in Sabah

SDC 11MP Direction & Strategy – Unleashing the Potential of Sabah

• Increase high yield, long stay tourists

• High end development (resorts, residences, etc)

• Focus on aquaculture sector (shrimp, seaweed, sea cucumber, cage fishing)

• Value add from food processing, packaging & Biotech

• Complete the OGE value chain with downstream activities (petrochemical, transmission, etc)

• Increasing mixed development (commercial and residential) to promote people to live and spend in KK

• Build skills to support the emerging industries (hospitality & tourism, OGE, manufacturing, Agriculture, etc

• To improve accessibility on public transportation services and infrastructure for locals and tourists

Tourism

Agriculture

OGE

Livability

Logistic • Enhance Intercity & Global Connectivity

Education

Palm Oil • Promote high value add downstream activities

Manufacturing • Further grow manufacturing sector

Focusing on the Expansion of SDC 10MP Programmes by Driving the Keys Focus Areas while Focusing on the Enhancement of Global Connectivity & the Efficiency of Logistic Services

Key Focus Areas Expansion in Positioning Sabah as a

Leading Economic Region in Asia as an

Attractive Destination for Foreign Direct

Investment with Strong Supporting

Infrastructure and a Ready Pool of

Knowledge Workers.

Continue to Drive Key Focus Areas

To Improve Global Competiveness via

Enhancing International Connectivity

Integration of Land, Sea & Air Logistic

Services

Improvement of broadband Internet

Services

Enhancing the Quality of Human capital

Enhancing Knowledge Intensive & High

Technology Industries

Effective Government Delivery Service

Key Strategy

4

Services Sector Agriculture Sector Manufacturing Sector

SDC’s RMK-11 - Logistic

Enhancing Global Connectivity to and from International Market

To improve Global Competitiveness by providing strong supporting infrastructure and connectivity to and from international market.

Strategy

Position Sapangar Bay Container Port (SBCP) as a Logistic Transshipment Hub and value add for cargo between Kalimantan–South Philippines (ASEAN) and North Asia (China, Japan, Korea). Integration of KKIP as Free Economic Zone with the Sapangar Bay Trans-shipment Hub.

Position Sandakan, Lahad Datu and Tawau as Regional Trading Hubs in Borneo and BIMP-EAGA by expanding the role of Sandakan, Lahad Datu and Tawau Ports to leverage on AEC. These ports will also serve as feeder ports to SBCP.

Position Kota Kinabalu Airport as International Air Cargo/Freight Logistic Hub.

Improve Infrastructure for Road & Rail connectivity linking all major cities, towns & Industrial Estates in Sabah.

Providing High Speed Internet Connection to all major cities, towns and industrial areas (Direct Tapping into Internal Gateway)

Target Activities

5

Development of

SBCP Transshipment Hub

7

- For Manufacturing & Transshipment Current Capacity 0.25 TEUs/Year • 0.5 TEUs/Year by 2018 • 1.0 TEUs/Year by 2021 • 2.0 TEUs/Year by 2027 • 3.5 TEUs/Year by 2034

Sapangar Bay Transshipment Hub 30 Years Master Plan

- Supporting Car Industry (KKIP FEZ)

- Oil Refinery & Distribution

Sea Fright Connectivity – Feeder Shipment & Transhipment Hub

Sarawak

Sabah Peninsular Malaysia

Port Klang

SBCP

8

MLO

Feeder Shipment

AEC

AEC

AEC

MLO

9

Sapangar Bay Transshipment Hub 30 Years Master Plan

Game Changer - Direct International Connectivity

10

REGIONAL TRANSSHIPMENT HUB FOR THE FAR EAST & BIMP EAGA

Development of Sabah Air Logistic & Aviation Hub

Sabah Aviation Hub Master Plan

12

Development of KKIA as “Regional Aviation Hub” with a 30-year horizon in the following Critical Business Areas;

1. Air Passenger i. Air passenger demand and terminal development

2. Air Cargo i. Air cargo demand & logistics hub

3. Free Economic Zone i. Food Processing ii. Electronic & Electrical iii. Industrial Fabrication iv. Pharmaceutical v. Warehousing & E-logistics

4. Other Economic Pillars i. Aerospace MRO, training and related segments ii. Business Aviation iii. Airport Hotels iv. Premium Outlet Park

Air Fright Connectivity

13

Air Logistic – Kota Kinabalu Airport as International Air Freight Transhipment Hub

2.6 2.7 2.4

2.8 3.1 3.0

3.3 3.3

3.9 4.0 4.0 4.4

4.7 4.9 5.2

5.8 5.8

6.9 6.8 6.6

7.3

-

1

2

3

4

5

6

7

8

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

Pas

sen

ger

Mill

ion

s

Kota Kinabalu International Airport Historical Passenger Volumes

CAGR 20-Yr: 5.2%

Current Airport

Analysis

Airport Passenger

Analysis

Air Cargo Analysis

and Forecast

Future Airport

Development Economic Zone

Analysis

Future Sites

Analysis

Source: Frost & Sullivan, MAHB, Kota Kinabalu International Airport Masterplan, Kota Kinabalu International Airport Repurpose Study for T2

Operational Area

Cargo

Passenger Terminal

Landside area

Support

Maintenance/Airline Support Area

General Aviation

Available land perimeter

General Cargo and

Perishable Cargo

Facility with an

annual capacity of

75,000 tonnes

T2 to serve as General

Aviation Terminal due

to it’s unsuitability for

cargo operations as

indicated in the KKIA

repurpose study dated

11th March 2016

Total

18 million

Passenger

Capacity

Additional 9 million

passenger capacity

expansion

Existing 9 million

passenger

capacity +

Current Kota Kinabalu International Airport Full Capacity

The maximum capacity of the current airport is estimated to be at 18 million passengers with

an additional 40 acres of State Land being gazetted for such expansion.

14

Kota Kinabalu International Airport Development Plan

Current Airport

Analysis

Airport Passenger

Analysis

Air Cargo Analysis

and Forecast

Future Airport

Development Economic Zone

Analysis

Future Sites

Analysis

Note: 18 million capacity are indicative figures only and needs to be further verified by airport engineers

7 7 8 9 9 10 11 12 12 13 13 14 15 16 17 18 18 19 20 21 22 23 24

25 26

27 28

29 30

31 33

-

5

10

15

20

25

30

35

40

45

20

15

20

16

20

17

f

20

18

f

20

19

f

20

20

f

20

21

f

20

22

f

20

23

f

20

24

f

20

25

f

20

26

f

20

27

f

20

28

f

20

29

f

20

30

f

20

31

f

20

32

f

20

33

f

20

34

f

20

35

f

20

36

f

20

37

f

20

38

f

20

39

f

20

40

f

20

41

f

20

42

f

20

43

f

20

44

f

20

45

f

Pas

sen

ger

Mill

ion

s

High Realistic Case Low

CAGR 30-Yr: High: 6.2% Realistic: 5.5% Low: 3.1%

Potentially breaching

9 million capacity in 2019

Potentially breaching 18 million capacity in 2031

KKIA Passenger Forecast

15

Forecast indicates that the airport would reach its current built capacity of 9 million in 2019. Given the land

limitations, the current airport would reach its max. capacity limit in 2031

Kota Kinabalu Int’l Airport Passenger Forecast

Reaching 27 million capacity in 2040

& 33 million in 2046

Current Airport

Analysis

Airport Passenger

Analysis

Air Cargo Analysis

and Forecast

Future Airport

Development Economic Zone

Analysis

Future Sites

Analysis

7 sites were screened in the site selection process.

New Airport Site Selection Options

16

Current

Airport

Location

Meruntum

Putatan

Benoni

Kimanis

Mandahan

Land based

Papar

Location Driving Distance

from Kota Kinabalu

Tuaran 43.6 km

Putatan 8.5 km

Meruntum 16.7 km

Papar 46.7 km

Benoni-Kimanis 53 km

Mandahan Land based

58 km

Mandahan Sea based

60 km

Mandahan

Reclamation

Tuaran

Notes:

• Putatan is an extension to existing airport, other locations are new sites.

• Mandahan and Benoni are land based, the other sites are based on reclamation

Current Airport

Analysis

Airport Passenger

Analysis

Air Cargo Analysis

and Forecast

Future Airport

Development Economic Zone

Analysis

Future Sites

Analysis

Although there are impacts and challenges such as loss of some coral reef and the potential diversion of the Petagas river,

these are considered likely to be acceptable from an overall strategic planning perspective. From an environmental and

hydraulic perspective, this option is considered feasible.

Option 7: Putatan (Alternate Option with the intent to maintain and expand the existing KKIA)

Land Reclamation Options

(2nd Runway with additional 18 million passenger capacity, Air Cargo Terminal & FEZ)

17

Passenger Capacity Planning • 12 million by 2019 • 18 million by 2023 • 27 million by 2031 • 36 million by 2040

Air Cargo Capacity Planning • 75,000 tonnes by 2019 • 150,000 tonnes by 2031 • 300,000 tonnes by 2040

Free Economic Zone (FEZ) • 200 acres by 2031

TAED

Development of Sabah Hinterland Connectivity

Sabah

Kota Kinabalu

Kimanis

SOGIP

Lok kawi Sandakan POIC

Lahad Datu POIC

Tawau

Kudat

Land Freight Connectivity – Pan Borneo Highway (~1,200 KM)

KKIP Free Economic Zone

SBCP Transhipment Hub

KK Int’l Air Freight Logistic Hub

Sapangar Bay Manufacturing & Logistic

Cluster

For details please visit www.sabahpanborneo.com

Scheduled Completion Phase 1 – by 2021 Phase 2 – by 2025

Development of Sabah High Speed Internet

(Developed by Common Tower Technology Sdn Bhd)

EXISTING SACOFA NETWORK

BRUNEI(BIG) CONNECTED TO WORLD

SJC, AAG & SMW3

AAG

SMW3

SJC

Legend:

Philipines

CONFIDENTIAL

INFRASTRUCTURE EXPANSION

CTTSB ROUTE VIA AAG AND SJC

BRUNEI-LABUAN FT-SABAH

FUTURE OF CTNET

CONFIDENTIAL

Wireless Mesh Network – KK Smart City

SABAH - a Regional Transshipment Hub for ASEAN by 2021

Your solution provider and partner in SDC

27