Kuching, Sarawak, Malaysia (15 May) -- The Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area Business Council (BIMP-BEBC) lauds the four leaders of East Asean Growth Area (EAGA)in their bold and aggressive move to improve transport connectivity in the sub-region.

During the 6th BIMP-EAGA Transport Infrastructure and ICT Development Clusters Meeting held here last month, Bernardino Vega, BEBC Executive Vice chair expressed the business sectors' appreciation with the ongoing negotiations for an agreement to facilitate the transport and transit of goods across EAGA borders as well as the Memorandum of Understanding (MoU) on the harmonization of border formalities and Customs Immigration Quarantine Security (CIQS) in all BIMP-EAGA entry and exit points.

"Such processes are clear demonstration of the leaders' sincere efforts to improve the business environment in EAGA", said Vega.

In an earlier roundtable meeting with ship owners, public and private port operators and BIMP-Facilitation Center (BIMP-FC) among others, BEBC affirmed that transport and logistics are critical to the development of trade,tourism and investments in BIMP-EAGA.

According to Vega, international shipping lines have limited calls at EAGA ports because of the low volume of international cargo coming in and out of these ports.

Vega added that small exporters mostly constitute EAGA's export industry and the limited access to direct calls has a significant impact on their supply chain cost. Thus, small exporters are forced to ship domestically from local port to the export port located in the capitals, thereby increasing the cost of transport.

Meanwhile, production areas are usually located in interior regions where road access is the most difficult and where roads are the least maintained.

While poor roads from the production areas leading to the ports result in longer travel time, BEBC also noted the lack of support facilities such as warehouses and cold storage in many of the BIMP-EAGA ports. These include the lack of suitable landside facilities including refrigeration facility especially for perishable goods, covered storage space, and cargo handling facilities.

As a consequence, cargo consolidation in many EAGA areas remains limited. Aside from harvests being not stored properly and perishable products not being able to survive shipment, inadequate storage along the supply chain has led to significant losses.

Moreover, the lack of information on cargo volumes is a major deterrent among shipowners and operators to invest in new routes within EAGA. BEBC noted that data and statistics on cargo volume are critical to the decision of ship owners and operators to service particular routes.

There are, however, efforts to compile information on cargo including data and statistics on cargo volume per port, final destination of cargo, frequency of shipment, nature of the cargo and projected growth of cargo volume among others.

Although the CIQS initiative has documented practices in some ports, this effort needs to be expanded to other major ports in EAGA.

"Current practices at least in the major gateway ports need to be documented", said Vega.

Vega said that the most urgent action that needs to be taken is to fully implement Article 2 of the MOU on Sea Linkages which relates to establishing the database on ports particularly on cargo volumes.

Vega hopes that as development partners of BIMP-EAGA, the Asian Development Bank (ADB) and German Technical Cooperation (GTZ), will continue to provide technical assistance in undertaking the transport and logistics studies in the sub-region.