Penang joins race for state port operator

Malaysian Insider, December 3, 2010

 

Lim Guan Eng

KUALA LUMPUR, Dec 3 — Penang is seeking to buy state port operator Penang Port Sdn Bhd (PPSB) from Putrajaya, which has received several offers for the profitable major port in northern Malaysia.

The Malaysian Insider understands that Chief Minister Lim Guan Eng sent the bid to PPSB’s owners, the Ministry of Finance. Others interested in the port include tycoons Tan Sri Syed Mokhtar Al-Bukhary and Datuk Siew Ka Wai, both of whom are said to be close to the Najib administration.

“Penang has already sent in a bid for PPSB. It believes it can do a better job than the current management,” a state government source told The Malaysian Insider.

PPSB made RM77.74 million in after-tax profit in 2009, up from RM22.70 million the previous year despite revenues falling to RM268.54 million in 20099 against RM277.04 million in 2008.

State government sources said Lim can bring in enough businessmen and experts to run PPSB, which apparently needs funds to deepen the port’s channel and also modernise its wharfs and berths.

“Lim has a few ideas to turn around the port and make it perform better,” a source said, pointing out that Penang owns the port’s land and waters and would have a say over who eventually owns PPSB.

Lim’s DAP colleagues had told Parliament on November 24 that Putrajaya should come clean whether Syed Mokhtar had bought into the management of PPSB, which is led by Penang Umno leaders such as PPSB chairman Datuk Seri Dr Hilmi Yahya and its managing director Datuk Ahmad Ibnuhajar.

A unit of Syed Mokhtar’s diverse infrastructure and logistics conglomerate was awarded a 4G network provider licence recently while another subsidiary is interested in acquiring the North-South Expressway (NSE).

But Syed Mokhtar is facing competition for the port operator from Siew, the pro-government industrialist who recently widened his Red Berry media company to include The Malay Mail tabloid, Bernama TV and business daily Malaysian Reserve.

Lim’s ruling Pakatan Rakyat (PR) state government is the political foe to the Barisan Nasional (BN) federal government, which recently appointed MCA president Datuk Seri Dr Chua Soi  Lek as regulator Penang Port Commission (PPC) chairman.

The PPC has licenced PPSB to run the port, which was privatised from January 1, 1994 when the island was ruled by BN. However, the shock results of Election 2008 has handed over the state to PR.

DAP lawmaker Tony Pua raised questions on November 23 over the widely-speculated takeover of the troubled Penang Port by Syed Mokhtar and demanded that the government disclose the full details of the privatisation process.

Petaling Jaya Utara MP Tony Pua pointed out to in Parliament that the port operations was already fraught with malpractice and irregularities, as underlined in the recent Auditor-General’s 2009 report, and was poised for a probe by the parliamentary Public Accounts Committee (PAC) in about two weeks’ time.

Pointing to a speculative report carried in Singapore’s Business Times last October, Pua noted that if the takeover did take place, it would be yet another direct affront to the government’s many promises of transparency and public accountability as underlined under Prime Minister Datuk Seri Najib Razak’s New Economic Model (NEM).

Pua described the move as another privatisation process “ala-Dr Mahathir” and questioned why the government had not conducted an open tender to allow the best bidder to develop the Penang Port.
Jelutong MP Jeff Ooi said that the Penang government felt “insulted and shortchanged” that the handover of Penang Port was not being done via open tender.

He also called for the suspension of PPSB chief executive Ahmad over reports of malpractices and irregularities in the port operations.

“The Penang government has suffered and contributed a lot through concessions given to the port authority, including the valuable prime land that has been alienated to them... notably, the one that is at the North Butterworth Container Terminal.

“According to the A-G’s report, there were a lot of malpractices here and the failure of the management has contributed to the sorry state of affairs.

“We want the CEO to be investigated by the CEO and the Malaysian Anti-Corruption Commission,” Ooi said.