Kelantan applies for injunction against Petronas

January 22, 2013

KUALA LUMPUR, Jan 22 – The Kelantan state government today applied for an interlocutory injunction to prevent Petroliam Nasional Berhad (Petronas) from paying oil royalties to the Government of Malaysia.

They are seeking to prevent Petronas from paying the five per cent oil royalty on the oil obtained from the state’s coast and sold by the company or its agents, pending the state government’s suit against the national petroleum corporation in 2010.

The application was filed through Messrs Tommy Thomas at the High Court registrars office, naming Petronas and the Government of Malaysia as defendants.

The Kelantan government also applied for an injunction to order Petronas to deposit the oil royalties into a profit earning syariah-compliant account, pending its suit against the company in 2010.

The Kelantan government sued Petronas for breach of contract, on Aug 30, 2010.

In its statement of claim, the state government claimed that the Kelantan Petroleum Agreement, signed on May 9, 1975, clearly stated that Petronas must pay five per cent of its oil revenue from on and off shore explorations.

It further claimed the agreement also stated that the payment must be paid in cash bi-annually.

The Jan 31 hearing at the High Court was postponed pending the application to appeal at the Federal Court. – Bernama

Syabas underperforming, daily production could be 463m litres, says Selangor

Malaysian Insider, July 25, 2012

Khalid pointed out that recent findings were proof that Syabas had failed to adhere to their responsibilities as agreed upon in the Water Privatisation Agreement 2004. — file pic

SHAH ALAM, July 25 — Water utility Syarikat Bekalan Air Selangor (Syabas) is underperforming as its treatment plants can produce an additional 463 million litres daily, Selangor Mentri Besar Tan Sri Khalid Ibrahim said today.

He also said the true output capacity reserves were actually 11 per cent and will increase to 18 per cent after March 2013 when mitigation work is completed, adding the water reserves reported by Syabas to be at two per cent was inaccurate.

“The total production capacity for treated water, for all 34 water treatment plants is 4,807 million litres daily (MLD) in comparison to Syabas’ ability to distribute 4,371 MLD, which shows 436 MLD buffer.

“This shows that it is Syabas that is underperforming,” Khalid told reporters here today after chairing the state executive council meeting.

The mentri besar said the Mitigation Project I to be completed March 2013 will increase treated water production to 5,139 MLD, allowing an increase of 332 MLD or 768 MLD depending on Syabas’ distribution capabilities.

Khalid pointed out that these findings were proof that Syabas had failed to adhere to their responsibilities to supply treated water to consumers as agreed upon in the Water Privatisation Agreement 2004.

“This failure strengthens our argument and plans of the state government to step in and manage Syabas with the intent to fix all weaknesses, which includes a recommendation to sack both the Executive Chairman and Chief Executive Officer of Syabas.

“I ask that the local councils along with a few executive councillors meet with the people to find a solution to their water problems, including bringing water tanks to these areas which have been facing water supply disruptions for years,” he said.

Khalid added that the Selangor government was consistent in its stance that the water issue can be solved holistically if the state takes over the water industry from all concession firms in order to offer a more efficient water supply at reasonable prices as hoped for through the Water Service Industry Act (WSIA) 2006.

He announced last week that he would use clause 32 of the concession agreement between the state, federal government and Syabas to step in and take over water distribution operations.

State Secretary Datuk Khusrin Munawi also said only a few locations were experiencing a water supply shortage, particularly in Cheras, as supply comes from the Sungai Langat water treatment plant.

“After four meetings with former employees of PUAS and also the state economic planning unit with Syabas, we have come to find that the water crisis depicted by Syabas is not as critical as they portray,” Khusrin told reporters here today, referring to Perbadanan Urus Air Selangor (PUAS) which has been taken over by Syabas.

Khusrin, who leads the state water monitoring committee which has been observing Syabas daily operations since July 18, was briefing the state executive council at its weekly meeting today.

“Other areas are not experiencing any difficulties as portrayed by Syabas in the media. And there is no such shortage in water supply,” he added.

Pulling plug on water rationing reveals Umno ploy, says Selangor

Malaysian Insider, July 23, 2012

A general view of the water treatment plant in Semenyih, July 23, 2012. Selangor insists that the reported water crisis has been manufactured to smear the state administration.—Picture by Saw Siow Feng

KUALA LUMPUR, July 23 ― Putrajaya’s admission that water rationing was not necessary in Selangor and Kuala Lumpur has proven that the issue was a political gimmick to discredit the Selangor government, state executive council member Elizabeth Wong said today.

She also said that Syarikat Bekalan Air Selangor (Syabas) has been turned into an Umno tool to coerce the Selangor government into approving the construction of the Sungai Langat Water Treatment Plant or Langat 2.

Putrajaya has said it will tender out the RM3.6 billion plant despite Selangor’s objections, citing hefty costs for constructing a new plant that will take two years to complete.

“The federal government has no real solution in improving the supply and management of treated water. In fact, they are trying to sabotage Selangor government efforts to do the right thing to protect people’s interests,” she said in a statement today.

Wong said Putrajaya did not enumerate Langat 2’s capability to address the water shortage whereas Selangor already has a RM225 million plan for water mitigation.

“What is needed is an independent committee to decide which project is more effective in solving the shortage of treated water at a low cost,” she added.

She told the Barisan Nasional (BN) federal government to acknowledge its mistake when signing the water privatisation agreement in 2004, saying the error cannot be rectified until now.

“The Selangor government has the right to take over Syabas under the Water Supply Industry Act 2006. The federal government’s decision to stop this effort shows that the BN government is partial to corporate companies linked to Umno rather than protecting the people’s interests,” she said.

Syabas is controlled by Puncak Niaga Bhd that is run by corporate figure Tan Sri Rozali Ismail, who is the Selangor Umno treasurer.

Wong also said that the chairman of the special Cabinet committee on water, Tan Sri Muhyiddin Yassin, has no experience in the matter and unable to contribute good ideas for water management.

“When he was the Johor mentri besar, he made the state water tariffs among the highest in the country,” she added.

She pointed out that efforts to privatise water supply in Johor to tycoon Tan Sri Syed Mokhtar Al-Bukhary’s MMC Corp Bhd will add to the “people’s burden”.

“The Johor people will face an unreasonable water tariff, unlike those in Selangor who receive free water. The BN government wants to pawn the rights of Johor people, but Pakatan Rakyat in Selangor will not keep quiet against those making a profit from people’s suffering,” the Bukit Lanjan assemblyman said.

Syed Mokhtar’s MMC conglomerate is seeking to form a special purpose vehicle with Pengurusan Aset Air Bhd (PAAB), a wholly-owned company under the Minister of Finance Incorporated, to take over the country’s water assets, The Edge Financial Daily reported today.

Muhyiddin, who is also deputy prime minister, also told reporters earlier today that the proposed Langat 2 water treatment plant was important to prevent Selangor, Kuala Lumpur and Putrajaya from reaching critical water supply levels by 2014.

He said the federal government will refer the Selangor government’s planned takeover of Syabas to the Attorney-General as it involved legal technicalities.

The Selangor government has also said it will pay to upgrade two water treatment plants to increase water supply if Putrajaya continued to delay transferring RM225 million for the project.

The two plants, Sungai Selangor Plant 1 (SSP1) and Sungai Selangor Plant 2 (SSP2), are currently running below their maximum capacity output due to infrastructural limitations to channel treated water out to the water supply network.

Syabas wants to start water rationing

STAR, 15 July 2012

PETALING JAYA: Water concessionaire Syabas will seek permission to start rationing immediately in Kuala Lumpur, Hulu Langat and Klang because of the worsening water supply shortage.

Syabas chief executive officer Datuk Ruslan Hassan said Selangor, Kuala Lumpur and Putrajaya were now facing a water crisis with reserve levels at 34 treatment plants down to an average of 2% way below the “safe mark” of at least 20% (see table).

The company asking for rationing approval from the National Water Services Commission listed 112 areas in Klang, Petaling, Hulu Langat and Kuala Lumpur as the worst hit by intermittent disruptions since April, affecting 209,678 premises and some one million residents.

Taps running dry: Ruslan (second from left) presenting drinking water to residents of Taman Sungai Besi Indah in Seri Kembangan who have been experiencing water shortage.

“We can no longer supply adequate water to Kuala Lumpur, Hulu Langat and Klang because we do not have the needed reserves,” Ruslan said, adding that the situation could worsen because of the dry spell.

He was speaking to reporters during the distribution of water to residents of Taman Sungai Besi Indah in Seri Kembangan, one of the areas in Selangor hit by supply disruption.

The housing estate and its surrounding areas have been without water since Friday evening.

Ruslan said the company was preparing a list of neighbourhoods that would be affected by the rationing, with supply to be cut off either for several hours daily or on alternate days.

He said Syabas had received thousands of telephone calls from angry residents complaining of supply disruptions.

The company's 42 water tankers, 6,700 static water tanks and 3,000 employees could only cope with a disruption affecting a maximum of 250,000 premises at any one time, he added.

“If the situation worsens, up to 7.1 million residents in Kuala Lumpur, Putrajaya and Selangor will be affected. This will be beyond our ability to handle on our own,” Ruslan said.

On the unwillingness of the Selangor Government to agree to the federal proposal for a Langat 2 treatment plant and a Pahang-Selangor transfer of raw water, Ruslan urged the two sides to negotiate.

“We ask the state and federal governments to settle whatever differences they have to resolve this issue to ensure adequate water supply,” he said.

Keeping stock: Salmah Mad Amin carrying pails of water provided by Syabas following water supply shortage at Taman Sungai Besi Indah in Seri Kembangan.

Ruslan said the Federal Government had approved about RM650mil worth of mitigation projects to cope with demand while waiting for the Langat 2 project impasse to be resolved.

These include the Sungai Labu water treatment project to meet the needs of Sepang and Nilai and Phase 3 of the Sungai Selangor water scheme to serve southern Selangor.

Ruslan said all the projects were scheduled to be completed by 2015.

Peter Chin: Federal take over of water concessionaires only in emergencies

STAR, 12 July 2012

SHAH ALAM: The Energy, Green Technology and Water Minister's power to forcefully take over water operations from concessionaires under the Water Services Industry Act (WSIA) only applies during an emergency.

Minister Datuk Seri Peter Chin Fah Kui said he could not speed up the restructuring of the water industry in Selangor by forcing the existing operators to sell their assets to the government under normal circumstances.

“I have the power to make such an announcement only during an emergency. Then I can take over (operators) Syabas, Abbas, Splash and others. But we have yet to reach a state of emergency,” he told the audience at a water forum here organised by his ministry.

Chin repeated his call to the Selangor state government to not link the water industry restructuring exercise with the construction of the Langat 2 water treatment plant.

He said the issue of water shortage must be addressed urgently, but there was plenty of time to negotiate the water industry restructuring deal.

“I asked the Attorney-General if I can tender for Langat 2 without the consent of the Selangor state government. He said no, because land matters are under the purview of the state.

“If I gave out the tender, the state can block the contractors from entering the site,” he said.

Agriculture and Agro-based Industries Minister Datuk Seri Noh Omar, who is also Selangor Umno deputy chairman, said the state government should allow Langat 2 to proceed to ensure adequate water supply and only debate over the water tariff rates later.

“If there is no point discussing tariffs if there is no water to supply,” he told reporters after the forum.

Business, worker groups reject Penang Port privatisation

By Lee Wei Lian

Malaysian Insider, July 10, 2012

KUALA LUMPUR, July 10 — A group of manufacturers and port workers have rejected Putrajaya’s proposal to privatise Penang Port which could spell trouble for any plans for a smooth takeover by tycoon Tan Sri Syed Mokhtar Al-Bukhary.

Both state Pakatan Rakyat (PR) and Barisan Nasional (BN) leaders have also voiced their disapproval to the Finance Ministry plan to sell the port to Syed Mokhtar’s Seaport Terminal, which also runs the Port of Tanjung Pelepas and Johor Port over fears that Penang could be reduced from a northern shipping hub to a minor role.

“Reject the privatisation of Penang Port to an outsider done without consultation with the people of Penang,” said the first resolution agreed by the 42 representatives of local groups in a statement issued last night.There is also fear among local BN politicians that the federal government’s move could cost them a chance to regain the state in the next general election due by next April.

The statement from the Penang state government said the Malay, Indian, Chinese Chambers of Commerce, the Federation of Malaysian Manufacturers (FMM), the Malaysian International Chamber of Commerce and Industry (MICCI), Frepenca (the Free Industrial Zone, Penang, Companies’ Association), logistics providers, freight forwarders, importers and exporters, shipping companies and agents as well as stevedores and port employees had rejected the port privatisation plan which they say would reduce the 220-year-old port to feeder status.

The rejection of the planned privatisation was one of five resolutions adopted after the various groups had met with the state administration which had initiated a roundtable discussion.

The other resolutions included calling for the immediate deepening of the port channel to accommodate larger vessels, the rejection of any proposal to relegate the port to feeder status, the revamp of the iconic Penang ferry service and that the port be returned to the state.

Penang Chief Minister Lim Guan Eng had come out strongly against the deal, saying that it was unlikely that Seaport Terminal would channel resources into Penang Port as the latter would prefer to boost his main transshipment hub Port of Tanjung Pelepas in Johor while “condemning” Penang Port, which is closely tied to the identity and economy of the state, into a “feeder port.”

Penang BN chairman Teng Chang Yeow had also urged the federal government to review its decision to privatise the island’s port, saying that many industry groups were opposed to the move and it was also counter to the sentiment of Penang folk.

MCA president Datuk Seri Dr Chua Soi Lek, who is also Penang Port Commission chief, said however that any attempt at non-co-operation by the state administration was akin to self-sabotage as the move to sell the port was made with an eye on enhancing efficiency.

“The privatisation is not to sabotage but to improve the efficiency of the port. They can fight the federal government or try to derail it but if they refuse to co-operate they will be sabotaging themselves,” he had said.

It is unclear however if political and industry resistance would be able to scupper the deal, which was confirmed by the Transport Ministry last month, especially if Syed Mokhtar’s track record is anything to go by.

The media-shy businessman has in recent years managed to assemble a vast empire of strategic assets spanning from ports to power plants, from rice and gas distribution to national carmaker Proton.

His logistics empire includes Pos Malaysia, the two ports in Johor, an airport, and his flagship enterprise MMC was reported to be evaluating the takeover of national railway KTM Berhad. MMC is also part of a joint venture working on the country’s largest infrastructure project, the My Rapid Transit (MRT) in the Klang Valley.

The acquisition spree has come at a heavy cost however and opposition lawmaker Tony Pua estimated that Syed Mokhtar’s companies have a combined debt of RM34.3 billion or more than 10 per cent of all local corporate bonds as of 2011.

Analysts said that a takeover of Penang Port by Syed Mokhtar could potentially see the port being grouped together with Johor Port and Port of Tanjung Pelepas in a new corporate entity and listed on the stock exchange.

Penang Port has declined from its once premier status ever since its free port status was taken away in the 1974.

In contrast, newcomer Port of Tanjung Pelepas started operations in 1999 but now handles more than six million TEUs a year, five times more than Penang Port.

Penang also saw cargo volumes growing only 5.8 per cent a year between 1995 and 2009 compared with Port Klang which grew 14.2 per cent annually.

The PR-controlled state administration has complained that federal ownership of the port operator has worsened its financial position, with net debt rising from RM148 million in 2004 to RM832 million in 2009 — a 462 per cent increase in five years.

Selangor to take over Syabas water supply work

By Hafidz Baharom

Malaysian Insider, July 16, 2012

SHAH ALAM, July 16 — Selangor will take over water utility Syabas’ operations to avert a supply crisis that has been described as “suspicious”, Mentri Besar Tan Sri Khalid Ibrahim said today.

He said the state government was invoking clause 32 of the concession agreement to Syarikat Bekalan Air Selangor (Syabas) and will inform the federal government of its decision.

“The water shortage and the announcement of a water-rationing programme by Syabas are suspicious to the Selangor state government as both the State Water Commissioner and Syabas’ own board of directors were not informed of this proposal,” Khalid told a press conference here.

He has also directed the State Secretary and the State Water Commission to monitor Syabas’ operations and present a daily report on the current water levels state-wide.

“As of April 2012, Syabas still has RM2.8 billion in arrears and has failed to reduce non-revenue water to 20 per cent,” he added.

Khalid also said the early audit reports showed that Syabas was not handling its capital expenditure well.

The mentri besar also said legal action would be taken if Putrajaya refused the state’s request to step in and resolve an impasse over future water supply.

On July 14, Syabas presented the Malaysian National Water Services Commission (SPAN) with a water-rationing plan that will affect the Klang Valley, particularly Kuala Lumpur, Hulu Langat and Klang.

In its last weekly report available on its website, Syabas recorded on July 5 that the average demand for water was 4,324.79 million litres a day (MLD) with clean water reserve being at 46.21 MLD, or 1.6 per cent, far below the recommended reserve of 20 per cent.

The utility provider also stated in June that the water shortage was caused by a lack of rain, contamination of rivers and scheduled maintenance work at water treatment plants.

Illegal to meddle in Selangor water issue, MB tells Putrajaya

By Lisa J. Ariffin

Malaysian Insider, June 17, 2012

KUALA LUMPUR, June 17 — Putrajaya’s “interference” in the Selangor water issue is unlawful, Tan Sri Khalid Ibrahim has alleged, referring to a 2006 legislation which he says gives the state government full power over water management. 

Malay daily Sinar Harian today reported the Selangor Menteri Besar as pointing out that the Water Services Industry Act, mooted and approved by the federal government in 2006, forbids the latter government from encroaching on the state’s powers. 

“I think the federal government cannot do it. This is because in the constitution, water management is under the state government, but its implementation and understanding is between the two governments,” Khalid was quoted as saying in the paper. 

He added that his government have also made an agreement with the federal government to resolve the water issue “in the interest of the people” and hoped Putrajaya would address the issue sincerely. 

“If they keep questioning the actions of the state government based on political reasons, we will just wait until the results of the next election,” he warned. 

“This is because I believe the power rests in the people to determine who is more [sic] fit to govern the state,” he added. 

Khalid had reportedly made the statement yesterday in response to Selangor BN deputy chairman Datuk Noh Omar, who accused the PKR government of conducting public forums for show but failed to resolve the issue of water supply. 

Noh Omar made this statement following the Selangor Water Forum, which he alleged was bias as it was attended only by state executive councillors, Pakatan Rakyat (PR) MPs, media representatives and only a few members of the public. 

Khalid said yesterday this was because the forum was considered more relevant to the people who choose less expensive means to obtain clean water. 

He said Selangor water concessionaire Syabas was not invited to participate in the discussion as the company is suing the state government. 

He also expressed disappointment that the Energy, Green Technology and Water ministry had also failed to attend a similar forum organised previously. 

Bernama Online reported last week that the Selangor government plans to proceed with its plans to restructure the water services industry, a move that will revoke the agreement under the Water Services Industry Act 2006. 

The state and federal governments, Syabas and Selangor’s other water players have been locked in a protracted dispute over the proposed restructuring of the state’s water services. 

Khalid was reported as saying last week that the restructuring will proceed despite objection from the federal government and Syabas. 

The Selangor government will use several approaches including tapping groundwater resources to balance the water supply needs of consumers. 

Khalid said the Selangor government would also increase water tariffs once every three years and of no more than 12 per cent. 

Syabas had filed an originating summons against the Selangor government and demanded RM471,642.916 compensation for failing to agree to a hike in water tariff.

Penang Port’s good health raises more questions over privatisation

Malaysian Insider, 23 June 2012


KUALA LUMPUR — Penang Port Sdn Bhd’s (PPSB) sixth consecutive annual profit last year and a plan to boost incoming cargo by 60 per cent in three years have led lawmakers from the island to pose further questions of Putrajaya’s plan to privatise the port.


PPSB managing director Datuk Ahmad Ibnihajar had said yesterday PPSB made a net profit of RM15 million last year, contradicting Penang Port Commission (PPC) Chairman Datuk Seri Dr Chua Soi Lek’s assertion that it only earned RM180,000.


He also said that dredging the port to 14.5 metres to approach channel depth from the current 11.5 metres, a project that has been shelved by the federal government, would be a key driver to increase transshipment services from five to 20 per cent.


“The deepening works will enable PPSB to attract more mainliners and larger vessels from the Middle East, China and India. PPSB is expected to handle two million TEUs (20-foot equivalent units) by 2015 from 1.2 million TEUs in 2011,” he said, adding that the port would likely handle 1.278 million TEUs this year.


This led two Penang MPs today to call for Dr Chua and the federal government to explain why it was refusing to carry out the dredging as promised earlier and the rationale for privatising a port which is currently bringing in profits for a company wholly-owned by the finance ministry.


“It is time for Chua to explain to the Malaysian public on Ahmad’s assertions,” said Chow Kon Yeow and Liew Chin Tong in a joint statement, who have previously accused the MCA president of conspiring with the logistics tycoon in a “sinister” plot to undermine Penang’s economy.

“And whether Chua’s intervention on behalf of Tan Sri Syed Mokhtar al-Bukhary has ruined Penang Port’s viability and expansion plan,” added the two lawmakers from DAP, which controls the state government.

Liew also told The Malaysian Insider “Chua has been painting a picture of Penang Port being a loss-making outfit and unviable so privatising it will appear financially prudent on the part of the federal government.
“Ahmad’s response now raises doubt over the rationale of the privatisation exercise,” he said.

Dr Chua had last week told Penang not to “sabotage itself” by refusing to cooperate with the federal government’s plan to privatise Penang Port, a move he insists would increase its competitiveness.


The PPC chief warned Lim Guan Eng’s administration that its decision to reject the privatisation of PPSB and implied threat to derail the move “would just mean the whole port won’t work.”


The Penang government has resolved to reject the privatisation of PPSB to Syed Mokhtar’s Seaport Terminal and demanded Putrajaya undertake a promised RM353 million dredging project crucial for the port’s expansion.


Lim, who is also DAP secretary general, also warned that the privatisation plan would be “disjointed” as “strategic portions of land” in the port belong to the state.


Dr Chua has also repeatedly said that while he did not know if dredging was a pre-requisite of the privatisation deal, it would not make good business sense to take on PPSB’s RM1.3 billion debt without making the necessary investment to build the business.


“But dredging is not the sole factor that will expand Penang Port into a transshipment hub. It will take some time. Penang thinks if you dredge deep enough, then everyone will come but it doesn’t work like that,” he said.


The former health minister pointed out that PPSB still had a long way to go, claiming it only made about RM180,000 in profit last year as compared to Seaport Terminal’s Johor Port which made RM185 million.

Putrajaya confirmed last week Seaport Terminal had won the bid to take Penang port private but said the firm must foot the bill of dredging work although it failed to specify if dredging would be compulsory under the concession.

Dr Chua had last weekend brushed aside the accusation that he is masterminding a plan that will see Penang Port being relegated to a feeder port, insisting that the decision was made by the prime minister.

The PPC chief was reported as saying that any decision is at the discretion of Datuk Seri Najib Razak and the matter has been discussed for years with the intention of increasing the efficiency of the port.

But Datuk Seri Ong Tee Keat, who was transport minister from March 2008 to June 2010, had said last month the controversial decision to privatise Penang Port only materialised after Dr Chua was appointed chairman of its regulatory body in November 2010.

“Yes, because the government had no plans to privatise when I was transport minister,” Ong had told The Malaysian Insider when asked if plans to privatise the port, which has seen the federal government pour in RM1.1 billion in capital expenditure between 2004 and 2009, only came about after Dr Chua’s appointment.


Several DAP lawmakers from Penang had also accused Dr Chua last month of trying to stifle the economy of the island state controlled by their party by shelving plans to dredge the port’s channel.

Three MPs, including Penang DAP chief Chow, said the Johor-born former Labis MP was conspiring with Syed Mokhtar to benefit his home state of Johor at Penang’s expense and relegate Penang Port to a feeder for the logistics tycoon’s PTP.


But Dr Chua responded by saying the decision not to embark on the RM350 million dredging was made collectively by the National Economic Council (NEC) as the port is set to be privatised by the Finance Ministry (MoF) and the cost should be borne by the concessionaire instead.

But several shipping industry players expressed doubt over whether Syed Mokhtar will deepen its channel at his own cost when he also controls the rival PTP.

“Definitely it makes more sense to turn Penang Port into a feeder port instead of splitting up resources and competing with yourself as well asPort Klang,” said a former top port official.

The Penang DAP lawmakers have said that the dredging was needed to allow bigger ships measuring 8,000 TEUs (twenty-foot equivalent units) to call on the island state along the Straits of Malacca, the world’s busiest waterway.


Bukit Bendera MP Liew has warned that Syed Mokhtar may “engage in asset stripping by bringing the seven units of Super Port Panamax cranes from Penang to PTP” and replace them with six smaller quay cranes from Johor Port, run by the tycoon’s Seaport Terminal.

The DAP strategist said that with the smaller cranes unable to handle ships measuring 4,000 TEUs and above, Syed Mokhtar would have no reason to carry out dredging work around the Penang channel.

The Penang DAP MPs have repeatedly called for the privatisation exercise to be aborted after Dr Chua’s rationale that the government should not spend on an asset it is planning to sell.


They said that following the same logic, the RM1.1 billion — or over three times the cost of dredging — spent over five years up to 2009 to double the port’s capacity to two million TEUs meant that Putrajaya should scrap the sale altogether.

The Malaysian Insider reported in December 2010 that the Cabinet had approved the MoF’s sale of PPSB to PTP despite competitive bids from other businessmen and also the Penang government, which owns the port land.


Penang Chief Minister Lim wrote to Prime Minister Datuk Seri Najib Razak in early December 2010 to put in a bid to run the port, which has declined since the MoF took over in 1994.


The port lost its free-port status in 1974 but Najib’s Barisan Nasional (BN) is offering to reinstate its free-port status if the federal coalition regains Penang which it lost in Election 2008.


PPSB is a wholly-owned subsidiary of MoF Inc while the regulator, PPC, also reports to Putrajaya through the Transport Ministry.

It is learnt that cargo volumes at Penang Port have failed to match that of Port Klang and Tanjung Pelepas, growing only 5.8 per cent a year between 1995 and 2009, against Klang which grew 14.2 per cent annually.


PTP began in 1999 but now handles more than six million TEUs a year, five times more than Penang Port.
Penang has complained that federal ownership of the port operator has worsened itsts financial position, with net debt rising from RM148 million in 2004 to RM832 million in 2009 — a 462 per cent increase in five years.

Penang says port privatisation will hurt Malaysia’s competitiveness

By Shannon Teoh

Malaysian Insider, June 19, 2012

KUALA LUMPUR, June 19 — Penang warned today Malaysia's competitiveness as a trade and investment destination will be hurt by plans to privatise Penang Port Sdn Bhd (PPSB), which it says will relegate it to a feeder port.

Chief Minister Lim Guan Eng told a press conference today that as Penang accounted for a quarter of Malaysia's trade and attracted the most manufacturing foreign-direct investment (FDI) of all states in the past two years, the move "made no sense at all."

"You can't afford to let Penang Port become a feeder port," the DAP secretary-general(picture) said, referring to Putrajaya's proposal to let Tan Sri Syed Mokhtar al-Bukhary's Seaport Terminal run the port.

His policy adviser Liew Chin Tong also added that "once you are a feeder port with no direct call, it will cost more and take longer to ship there."

"The current plan damages Malaysia's competitiveness by making it more difficult to do business in Penang, one of its main trade and industry centres," the Bukit Bendera MP said.

The plan has come under fire from Penang DAP lawmakers who say the logistics tycoon will strip assets from the island's port and prefer to boost his main transshipment hub Tanjung Pelepas Port (PTP) in Johor while condemning Penang Port into a feeder port.

They had also accused Penang Port Commission (PPC) chairman Datuk Seri Dr Chua Soi Lek last month of conspiring with Syed Mokhtar to stifle the economy of Penang by shelving plans to dredge the port’s channel, benefitting the MCA president's home state of Johor.

Penang resolved last week to reject the privatisation of PPSB to Syed Mokhtar, demanding Putrajaya undertake the promised RM353 million dredging project crucial for the port’s expansion and condemned Dr Chua for “selling out” the rights of Penang folk.

But the former health minister told the state government not to “sabotage itself” by refusing to cooperate with the federal government’s plan to privatise Penang Port, a move he insists would increase its competitiveness.

The Penang Port Commission (PPC) chief warned Lim Guan Eng’s administration that its decision to reject the privatisation of Penang Port Sdn Bhd (PPSB) and implied threat to derail the move “would just mean the whole port won’t work.”

“The privatisation is not to sabotage but to improve the efficiency of the port. They can fight the federal government or try to derail it but if they refuse to cooperate they will be sabotaging themselves,” he said last week.

But Lim insisted today that "no self-respecting government will agree to diminishing the status of its own port."

"We want to cooperate but we cannot agree to Penang Port being reduced to a feeder port," adding that the state owned "strategic portions" of land on which the port is sited.

Although the Bagan MP refused to say if his administration would take back its land, he said "it will be very difficult to move forward... the port will be disjointed where this part you have but another part you don't."

Putrajaya confirmed on Wednesday that Syed Mokhtar’s Seaport Terminal had won the bid to take Penang port private but said the firm must foot the bill of dredging work although it failed to specify if dredging would be compulsory under the concession.

Dr Chua has said the federal government's decision not to embark on the RM350 million dredging was made collectively by the National Economic Council (NEC) as the port is set to be privatised and the cost should be borne by the concessionaire instead.

He also told The Malaysian Insider it did not make sense for any bidder not to improve the port’s performance as “it is not doing as well as it should be and has accumulated a debt of around RM1.3 billion.”

But several shipping industry players expressed doubt over whether Syed Mokhtar will deepen its channel at his own cost when he also controls the rival PTP.

“Definitely it makes more sense to turn Penang Port into a feeder port instead of splitting up resources and competing with yourself as well as Port Klang,” said a former top port official.

The Penang DAP lawmakers have said that the dredging was needed to allow bigger ships measuring 8,000 TEUs (twenty-foot equivalent units) to call on the island state along the Straits of Malacca, the world’s busiest waterway.

Liew has also rejected Dr Chua’s explanation, saying the former Labis MP was trying to project a “false image of Penang Port as a loss-making outfit when the debt is mostly due to the RM1.1 billion investment.”

The federal lawmaker warned that Syed Mokhtar may “engage in asset stripping by bringing the seven units of Super Port Panamax cranes from Penang to PTP” and replace them with six smaller quay cranes from Johor Port, run by the tycoon’s Seaport Terminal.

The DAP strategist said that with the smaller cranes unable to handle ships measuring 4,000 TEUs and above, Syed Mokhtar would have no reason to carry out dredging work around the Penang channel.

The Penang DAP MPs have also called for the privatisation exercise to be aborted after Dr Chua’s rationale that the government should not spend on an asset it is planning to sell.

They said that following the same logic, the RM1.1 billion — or over three times the cost of dredging — spent over five years up to 2009 to double the port’s capacity to two million TEUs meant that Putrajaya should scrap the sale altogether.

The Malaysian Insider reported in December 2010 that the Cabinet had approved the MoF’s sale of PPSB to PTP despite competitive bids from other businessmen and also the Penang government, which owns the port land.

Penang Chief Minister Lim Guan Eng wrote to Prime Minister Datuk Seri Najib Razak in early December 2010 to put in a bid to run the port, which has declined since the MoF took over in 1994.

The port lost its free-port status in 1974 but Najib’s Barisan Nasional (BN) is offering to reinstate its free-port status if the federal coalition regains Penang which it lost in Election 2008.

PPSB is wholly-owned by the finance ministry while the regulator, PPC, also reports to Putrajaya through the Transport Ministry.

It is learnt that cargo volumes at Penang Port have failed to match that of Port Klang and PTP, growing only 5.8 per cent a year between 1995 and 2009, against Klang which grew 14.2 per cent annually.

PTP began in 1999 but now handles more than six million TEUs a year, five times more than Penang Port, which Lim said had grown to handle 1.3 million TEUs last year.

Penang has complained that federal ownership of the port operator has worsened its financial position, with net debt rising from RM148 million in 2004 to RM832 million in 2009 — a 462 per cent increase in five years.

Syabas wants compensation from Selangor govt

STAR, 15 June 2012

KUALA LUMPUR: Syarikat Bekalan Air Selangor Sdn Bhd (Syabas) is applying for a court order that the Selangor Government owes it RM1.05bil in compensation for not increasing the water tariff.

Syabas is asking the Selangor government to pay the money with interest at the rate of 4% per annum from Nov 10, 2010 until it’s settled.

It has named Selangor state government as a sole defendant while the Malaysian Govern­ment was named as the third party in the lawsuit.

Selangor government’s lawyer Fahda Nur Ahmad Kamar said her client would appeal against the May 29 decision by the High Court to allow amendment to Syabas’ statement of claim.

“High Court judge Justice Mary Lim Thiam Suan had ordered parties to finalise documents including over issues to be tried and to file them by July 31.

“One issue is on water tariff rate,” she said yesterday.

In its amended claim, Syabas said it had never agreed to the postponement on the implementation of a new water tariff pending the restructuring of the water industry in Selangor.

Syabas claimed that it is entitled to be compensated by the Selangor government for the postponement.

The Selangor government said this suit has been filed in bad faith and is an abuse of process.

In a related development Selangor Barisan Nasional coordinator Datuk Seri Ir Mohd Zin Mohammad rebuked the state government for their handling of the critical state water supply issues, saying they were “insincere” and “arrogant”.

He said the Selangor Water Forum 2012 held on Wednesday, had not reflected the state government’s transparency in finding the best solution to problems, but instead had turned into a one-sided forum which ignored the voices of the people of Selangor and the related agencies.

“They should have invited all interested parties if they had honestly wanted to receive views which would solve their water problems for the good of the people of Selangor,” Mohd Zin said in a statement.

Syed Mokhtar’s Seaport must bear cost of dredging Penang Port, says MOT

By Shannon Teoh

Malaysian Insider, June 13, 2012

KUALA LUMPUR, June 13 — Putrajaya has confirmed that Tan Sri Syed Mokhtar al-Bukhary’s Seaport Terminal has won the bid to take Penang Port Sdn Bhd (PPSB) private and must foot the bill of dredging work deemed crucial to making the port competitive.

The Transport Ministry said in a written reply to a parliamentary question by Bukit Mertajam MP Chong Eng yesterday that negotiations with the company controlled by the logistics tycoon that runs Johor Port are currently ongoing.

An aerial view of Penang Port.

The Penang-based DAP lawmaker, one of three who have accused MCA president Datuk Seri Dr Chua Soi Lek of a “sinister plot” to privatise the port in the interest of his home state of Johor, also asked if “dredging Penang Port will be a condition of the contract.”

But Transport Minister and MCA secretary-general Datuk Seri Kong Cho Ha replied that “one of the conditions in the privatisation agreement is that the successful company must bear the cost of dredging Penang Port” without specifying if Seaport must undertake the work in question.

Dr Chua had last weekend brushed aside the accusation that he is masterminding a plan that will see Penang Port being relegated to a feeder port, insisting that the decision was made by the prime minister.

The Penang Port Commission (PPC) chairman was reported as saying that any decision is at the discretion of Datuk Seri Najib Razak and the matter has been discussed for years with the intention of increasing the efficiency of the port.

Datuk Seri Ong Tee Keat, who was transport minister from March 2008 to June 2010, had said last month the controversial decision to privatise Penang Port only materialised after Dr Chua was appointed chairman of its regulatory body in November 2010.

“Yes, because the government had no plans to privatise when I was transport minister,” Ong told The Malaysian Insider when asked if plans to privatise the port, which has seen the federal government pour in RM1.1 billion in capital expenditure between 2004 and 2009, only came about after Dr Chua’s appointment.

Several DAP lawmakers from Penang had also accused Dr Chua last month of trying to stifle the economy of the island state controlled by their party by shelving plans to dredge the port’s channel.

Three MPs, including Penang DAP chief Chow Kon Yeow, said the Johor-born former Labis MP was conspiring with Tan Sri Syed Mokhtar al-Bukhary to benefit his home state at Penang’s expense and relegate Penang Port to a feeder for the logistics tycoon’s Tanjung Pelepas Port (PTP).

But Dr Chua responded by saying the decision not to embark on the RM350 million dredging was made collectively by the National Economic Council (NEC) as the port is set to be privatised by the Finance Ministry (MoF) and the cost should be borne by the concessionaire instead.

He also told The Malaysian Insider it did not make sense for any bidder not to improve the port’s performance as “it is not doing as well as it should be and has accumulated a debt of around RM1.3 billion.”

Tan Sri Syed Mokhtar al-Bukhary. — file pic

“How will the new owner settle the outstanding debt without deepening the harbour? It does not make sense to assume the liabilities and not dredge. It only makes sense to DAP but it makes no sense to any businessman,” he said.

But several shipping industry players expressed doubt over whether Syed Mokhtar, who has emerged as a frontrunner to take Penang Port private, will deepen its channel at his own cost.

Industry players, who declined to be named, told The Malaysian Insider it would not make economic sense for a private player to dredge the port’s channel, especially for Syed Mokhtar also controls the rival PTP.

“Definitely it makes more sense to turn Penang Port into a feeder port instead of splitting up resources and competing with yourself as well as Port Klang,” said a former top port official.

The Penang DAP lawmakers have said that the dredging was needed to allow bigger ships measuring 8,000 TEUs (twenty-foot equivalent units) to call on the island state along the Straits of Malacca, the world’s busiest waterway.

One of them, Liew Chin Tong, also rejected Dr Chua’s explanation, saying the former health minister was trying to project a “false image of Penang Port as a loss-making outfit when the debt is mostly due to the RM1.1 billion investment.”

The Bukit Bendera MP warned that Syed Mokhtar may “engage in asset stripping by bringing the seven units of Super Port Panamax cranes from Penang to PTP” and replace them with six smaller quay cranes from Johor Port, run by the tycoon’s Seaport Terminal.

The DAP strategist said that with the smaller cranes unable to handle ships measuring 4,000 TEUs and above, Syed Mokhtar would have no reason to carry out dredging work around the Penang channel.

The Penang DAP MPs have also called for the privatisation exercise to be aborted after Dr Chua’s rationale that the government should not spend on an asset it is planning to sell.

Three DAP MPs have accused the Johor-born MCA leader Dr Chua of conspiring with Syed Mokhtar to benefit his home state at Penang’s expense. — file pic

They said that following the same logic, the RM1.1 billion — or over three times the cost of dredging — spent over five years up to 2009 to double the port’s capacity to two million TEUs meant that Putrajaya should scrap the sale altogether.

Although Dr Chua also insisted that PPC has not been informed of any winning bid, the elected representatives challenged him to deny knowledge of a Cabinet decision on November 25 to endorse Syed Mokhtar’s Seaport Terminal.

The Malaysian Insider reported in December 2010 that the Cabinet had approved the MoF’s sale of PPSB to PTP despite competitive bids from other businessmen and also the Penang government, which owns the port land.

Penang Chief Minister Lim Guan Eng wrote to Prime Minister Datuk Seri Najib Razak in early December 2010 to put in a bid to run the port, which has declined since the MoF took over in 1994.

The port lost its free-port status in 1974 but Najib’s Barisan Nasional (BN) is offering to reinstate its free-port status if the federal coalition regains Penang which it lost in Election 2008.

PPSB is a wholly-owned subsidiary of MoF Inc while the regulator, PPC, also reports to Putrajaya through the Transport Ministry.

It is learnt that cargo volumes at Penang Port have failed to match that of Port Klang and Tanjung Pelepas, growing only 5.8 per cent a year between 1995 and 2009, against Klang which grew 14.2 per cent annually.

PTP began in 1999 but now handles more than six million TEUs a year, five times more than Penang Port, which Liew said had grown to handle 1.3 million TEUs last year.

Penang has complained that federal ownership of the port operator has worsened its financial position, with net debt rising from RM148 million in 2004 to RM832 million in 2009 — a 462 per cent increase in five years.