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.

PBA Holdings Reports RM26.23 Million Profits For Last Year

June 23, 2011

GEORGE TOWN, June 23 (Bernama) -- PBA Holdings Bhd (PBAHB), the sole appointed water supply company for Penang, has reported a 76.99 per cent increase in pre-tax profit to RM26.23 million for the financial year ended Dec 31, 2010, from RM14.82 million recorded in 2009.

Chairman, Lim Guan Eng said the better performance was attributed to a 63 per cent improvement in other operating revenue and a 9.3 per cent increase in commercial water usage in Pulau Pinang.

"Besides, a five per cent reduction in administrative cost and a comprehensive revenue of RM1.24 million also contributed to the higher pre-tax profit," he told reporters after chairing its annual general meeting here today.

In line with the encouraging performance, PBAHB approved a final dividend of three per cent, less tax, bringing the total dividend payment for the year to six per cent.

Revenue rose 7.5 per cent to RM198.54 million in 2010, said Lim, adding that this translated into a 77 per cent increase in profits.

"This demonstrated efficient management of the company," Lim said.

-- BERNAMA

Water deal a 'victory for people'

New Straits Times, 2 June 2011

PUTRAJAYA: Penang yesterday signed a water restructuring deal with the Federal Government -- a move which Prime Minister Datuk Seri Najib Razak described as a "victory" for the people of Penang.
This was because the deal, signed with Pengurusan Aset Air Berhad (PAAB), which is a state government-owned company, "will not burden the people, financially".

Najib said the deal "means a lot" as Penang was an opposition-ruled state.

He hoped that other opposition-ruled states -- Selangor, Kelantan and Kedah -- would follow suit.
"This collaboration between the federal and state governments will see that water is managed more efficiently and clean and quality water is supplied to the rakyat at an affordable price.

"This deal is an example of strong cooperation between two quarters for the sake of the state's development and well-being of the people.

"The interests of the people have always been the government's priority.

"I hope other states will also join this initiative for the benefit of the people," Najib said at the signing ceremony here, yesterday.

He added that the water tariff would be decided by the state government.

Present were Energy, Green, Technology and Water Minister Datuk Seri Peter Chin Fah Kui, Penang Chief Minister Lim Guan Eng and PAAB chairman Datuk Seri Mohamad Tajol Rosli Mohd Ghazali.

Penang became the fifth state to agree to a water restructuring initiative after Malacca, Negri Sembilan, Johor and Perlis.

Najib said the move would lead to rapid development in the state, especially the water industry.

He said the water restructuring initiative began in 2005 when the Federal Government amended the federal constitution to allow water supply and service to come under the purview of both the federal and state governments.

Under the agreement, Penang will be alienating a total of RM655.2 million worth of water-related assets to PAAB while the company will take over the state's water liability from the Federal Government for the same sum and lease the water assets to the Penang Water Supply Corporation (PBAPP).

The deal also allows PBAPP to either finance its water development via PAAB or separately.

Najib said the deal was the "first of its kind" as the water operator was granted both service and facility licences that will run until May 31, 2014. "This initiative proves that the Federal Government is serious in creating a holistic and efficient water industry in the state by taking into account all aspects, such as water demand, operations and financial stability."

Lim, meanwhile, said the state government would be given RM1.2 billion in grants to expand the Mengkuang Dam in Penang. Construction will begin in August.

Currently, the dam's capacity is 23 million cubic metres. The expansion will see the capacity increasing to 78 million cubic metres to meet the state's water needs until 2020.

The expansion project has been awarded to China International Water and Electrical Corp (M) Sdn Bhd.

Lim also said the current 20 per cent water conservation surcharge for excessive water usage would be reviewed by the end of the year.

He also promised not to increase the water rates for domestic users.

Federal-state relationship from the investment perspective

Written by Lee Kah Choon

EDGE, Monday, 21 February 2011

The often-asked question by investors has been: How does the federal/state relationship affect their investment here? The simple answer to that has always been: The relationship is good and it will not affect their investment here. Look at the investment figures. In 2008, the state broke its record, attracting RM10.16 billion. And in 2010, it broke its own record again by being placed first in the national league table, surpassing Selangor for the first time by attracting RM12.24 billion in investments. Look at the property sector and we will find that all major developers in the country are in Penang, and that the average property prices in the state have doubled in the past 12 months. The services sector is doing just as well. For example, passenger arrivals at the Penang International Airport and the cargo handled saw an increase of 30% and 18% respectively in 2010 from 2009. Figures for foreign patients seeking treatment at Penang’s private hospitals are just as encouraging. In 2010, the number of foreign patients jumped 24% from 2009! In short, business is thriving and it is business as usual, if not better. However, if we look seriously beneath the surface, all is not well under the present arrangement. The present situation is not ideal and there is plenty of room for improvement. We need to look at the statistics in order to understand why. First, there is misalignment between what Penang generates for the country and what she gets in return. Historically, Penang has been sidelined in terms of allocation given by the federal government. For example, under the 8th and 9th Malaysia Plans (2001 to 2010), Penang state received only 3.1% of the total allocation. This ranked Penang at No 10 out of the 14 states, way behind the Federal Territory of Kuala Lumpur and Selangor. For the record, Kuala Lumpur received 11.5% under the 8th Malaysia Plan (MP) and 15.5% under the 9MP. Selangor received 9.6% under the 8MP and 7.8% under the 9MP. The situation is the same for grants received from the federal government. For the eight-year period from 2001-2008, Penang state received just 3.8% of the total national allocation, ranking 11th in the national league table. The situation is even more unfair when we consider that Penang, with her 1.6 million population (6% of Malaysia’s total population) contributes 30% of the nation’s total manufactured goods exported; more than 50% of electrical/electronics goods exported; two-thirds of medical tourism receipts; and nearly 9% of the country’s GDP. The list goes on. This situation is unhealthy and is tantamount to stunting the growth of the goose that lays the golden egg for the country. What Penang needs is to be given a fair share of its contribution to the federal coffers so that she will be able to create more wealth for the nation. To do that, Penang needs investment in its infrastructure to turn her into an international city and the regional hub for Sumatera-northern Malaysia-southern Thailand. While the allocation to deepen the seaport channel and upgrade the airport is welcomed, more needs to be done. For example, the state needs RM1.2 billion to upgrade the airport comprehensively, instead of the RM0.25 billion that it has been given for some ad hoc upgrading. Another case that comes to mind is the RM50 million Heritage Conservation Fund that is to be shared by Melaka and Penang. While RM30 million was allocated to the Melaka government directly, not a single sen has been given to the Penang government to this day. While we may not find good governance and fair play being stated in the investors’ applications for incentives, these attributes are of intrinsic value and are high on their demand list. And they are watching! Apart from financial allocations, more say should also be given to the state in terms of choice of projects and implementation, execution and participation. At the moment, most projects are conceptualised in Putrajaya, contractors appointed by Putrajaya and work carried out with minimum or no participation from the state government. Until and unless these anomalies are recognised and resolved quickly, nation-building will be out of step and moving in different directions. Datuk Lee Kah Choon is chairman of the executive committee of InvestPenang. This article appeared in The Edge Financial Daily, February 21, 2011.

Garbage deal refused

STAR, 7 February 2011
BUKIT MERTAJAM: There is no need for Penang to privatise solid waste management if the two municipal councils are competent enough to undertake the task.

State Local Government and Traffic Management Committee chairman Chow Kon Yeow said the state had informed the National Committee on Solid Waste Management last year that it wanted the two councils to continue handling solid waste.

“The committee has yet to get back to us on this,” he said when contacted here yesterday.

It was reported that the Federal Government had appointed E-Idaman Sdn Bhd to take over garbage collection and cleaning services in the northern region.

The company took over the services in Perlis and Kedah last year but not in Penang as the state government had reservations about the privatisation model.

Seberang Prai Municipal Council (MPSP) president Mokhtar Mohd Jait had said the council’s workers were carrying out garbage collection in 265 housing schemes or 43% of the total housing schemes in Seberang Prai.
He said the rest of the areas had been privatised to local contractors.

“We are in a dilemma of not being able to appoint new contractors to collect garbage while awaiting the state government’s deliberation with the federal authorities on the privatisation of solid waste management.

“The Federal Government had earlier advised all local authorities not to sign long-term contracts with new contractors pending the privatisation,” he told a full council meeting at the council headquarters in Bandar Perda here.

Chow said all state governments were given an option to accept or reject the privatisation of solid waste management under the Solid Waste and Public Cleansing Management Corpo­ration Act 2007.

He hoped the Federal Go­v­ernment would allow local authorities to sign long-term contracts with new contractors as well as employ new general workers to replace those who have retired.

He advised MPSP to negotiate with existing contractors to widen its areas of coverage to include housing schemes without contractors.

Syed Mokhtar gets Penang Port

By Jahabar Sadiq
Editor, Malaysian Insider

December 24, 2010

KUALA LUMPUR, Dec 24 — Tycoon Tan Sri Syed Mokhtar Al-Bukhary has won the race to take over the Ministry of Finance’s (MoF) Penang Port Sdn Bhd (PPSB), adding the northern port operator to his maritime logistics operations.

The Malaysian Insider understands that the Cabinet approved the sale at its meeting this week despite competitive bids from other top businessmen and also the Penang government, which owns the port land.
“The Cabinet has decided in favour of Syed Mokhtar,” a source told The Malaysian Insider, saying the tycoon’s company will buy into the port operator and the ferry service between Penang and Butterworth.
It is not known what price the government had agreed on but sources said it will be finalised soon.

Syed Mokhtar also owns PTP and Johor Port.

The influential businessman already owns Port of Tanjung Pelepas and Johor Port via MMC Corp Bhd, whose joint venture with Gamuda Bhd were also named Project Delivery Partner (PDP) for the RM36 billion Mass Rapid Transit (MRT) project in Kuala Lumpur.

Sources said Syed Mokhtar was the preferred contender as he already owned ports and airports although another Putrajaya-friendly tycoon Datuk Siew Ka Wei was keen to purchase PPSB through Ancom Logistics Bhd, whose chairman Datuk Abdul Latif Abdullah used to be PPSB chairman.

PPSB is a wholly-owned subsidiary of MoF Inc while the regulator, Penang Port Commission (PPC), also reports to Putrajaya through the Transport Ministry. Prime Minister Datuk Seri Najib Razak recently named MCA president Datuk Seri Dr Chua Soi Lek to head the PPC.

Penang Chief Minister Lim Guan Eng wrote to Najib in early December 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.

It is learnt that cargo volumes have failed to match 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.

Syed Mokhtar’s Tanjung Pelepas port began in 1999 but now handles more than six million TEUs (twenty-foot equivalent units) a year, six times more than the one million TEUs in Penang.

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.

Apart from the debt, any company taking over PPSB will also have to find nearly RM400 million to dredge the port channel and attract larger vessels there.

PPSB is already carrying out dredging in the North Channel to ensure it goes from 11.5m to between 13.5m and 14.5m in the coming year.

Lim’s administration had sought to take over PPSB.

PPSB has been planning to privatise and float its shares on Bursa Malaysia since 1996, but it was not able to do so because of the loss-making ferry service. A plan to hive off the ferry operation to Syarikat Prasarana Negara Bhd last year also fell through at the last minute. The ferry service has been a major hindrance to state-owned PPSB’s listing plans in the past due to the losses incurred, running into some RM13 million to RM15 million a year.

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 2009 against RM277.04 million in 2008.
State government sources said Lim could bring in enough businessmen and experts to run PPSB, which needed 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 on 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).

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.

Penang Ferry Service To Be Separate Entity From Oct 1

PENANG, Sept 24 (Bernama) -- The Penang ferry service will be separated as a subsidiary of Penang Port Sdn Bhd (PPSB) from Oct 1 as part of a restructuring plan to list PPSB on Bursa Malaysia.

PPSB Managing Director Datuk Ahmad Ibni Hajar said the plan had received the blessing of the Economic Planning Unit in the Prime Minister's Department, Finance and Transport Ministries.

" The move to separate the ferry service from PPSB was instructed by the EPU. The EPU wanted two separate entities -- PPSB and ferry service. Both are different operations," he told reporters.

Ahmad however said PPSB will work with Rapid Penang Sdn Bhd, a wholly-owned subsidiary of RAPID KL, to use the ferry services to transport Rapid Penang buses with passengers to the mainland.

He said PPSB will hold talks with Rapid Penang for its buses to use the ferry service to destinations on the mainland and vice-versa. "

Currently, there is only 25 per cent passenger load on our ferries. We're looking into ways to cut wastage.

" We've been making losses since 2002 in operating the ferry service," he added.

Last year, the ferry service incurred its worst ever losses following fuel price hike, chalking up RM24.6 million in losses, almost double of the RM14.4 million losses suffered in 2007.

PPSB has eight ferries plying the Penang Channel between the Raja Tun Uda Ferry Terminal in Butterworth and Sultan Abdul Halim Ferry Terminal on the island.

-- BERNAMA

PPC Also Interested In Ferry Services

June 17, 2009

PENANG, June 17 (Bernama) -- The Penang Port Commission (PPC) is interested in taking over the mainland-island ferry service operations from Penang Port Sdn Bhd (PPSB).

PPC chairman Tan Cheng Liang said the commission was preparing a working paper to be handed over to the Transport Ministry in 2-3 weeks.

"Anyone can take over the operations if they are capable and we are also interested as we are familiar with ferry activities.

"We have told the Transport Ministry and they have asked for a working paper for further action," he said at a news conference here Wednesday.

Tan said as the licensor for port activities in Penang, the PPC knew the ins and outs of ferry service operations.

PPSB had indicated handing over operations to the federal government as it could not bear the losses that have continued to rise over the last 10 years.

The Penang state government had also expressed interest but according to Tan till now a working paper had not been forwarded.

MPPP asked to take over Penang ferry

STAR, 8 June 2009

GEORGE TOWN: The state government has asked Penang Municipal Council (MPPP) to take over ferry operations, which had incurred RM21mil in losses, from the Penang Port Sdn Bhd (PPSB).

Chief Minister Lim Guan Eng said the state government was ready to take risks, challenges and losses as the ferry services had an historic and heritage background.

The ferry services, he said, were also important and meaningful to Penangites.

Lim said he was confident that MPPP could turna round and improve the running of the ferry services.

"We have not made a formal application to the Transport Ministry, but we have asked the newly elected MPPP president Tan Cheng Chui to have a meeting with the Penang Port Commission (PPC) chairman Tan Cheng Liang soon," he said.

Penang Port to hand over ferry ops to govt

New Straits Times, 5 June 2009

GEORGE TOWN: The Penang Port Sdn Bhd (PPSB) is expected to hand over its loss-making ferry operations to the Federal Government.

Penang Port Commission chairman Tan Cheng Liang said yesterday PPSB had incurred huge losses since it took over the ferry services from the PPC in 1994.

"Plans are afoot to work out an exit for PPSB."

On the ferry's fare adjustment, she did not rule out the possibility of raising the fare for passengers and vehicles to reduce the port's financial difficulty.

Tan said the problem would take time to be ironed out as the commission was under the Transport Ministry, while PPSB was under the jurisdiction of the Finance Ministry.

She said PPSB, a privatised entity, had signed a 30-year concession agreement with PPC in 1994 to operate the ferry and Penang Port, thus, there were legal aspects to be addressed.

On the crack in a passenger ramp at the Raja Tun Uda ferry terminal in Pengkalan Weld on Wednesday, she said it was because of wear and tear.

She said the repairs would be completed by 12.30pm today.