Penang rejects port privatisation, tells Putrajaya to dredge channel
KUALA LUMPUR, June 15 — The Penang government resolved today to reject the privatisation of Penang Port Sdn Bhd (PPSB) to tycoon Tan Sri Syed Mokhtar al-Bukhary and demanded Putrajaya undertake the dredging work crucial to make the port competitive.
Chief Minister Lim Guan Eng said it was unlikely that Syed Mokhtar’s Seaport Terminal Sdn Bhd would carry out the work according to standard, pointing out that Penang port has already been “condemned” to become a mere feeder port.
“If you want to make it a feeder port, would you dredge it properly? Of course, we hope it would not happen but what are the assurances?
“And there was no consultation with the state government. Of course, they can go ahead and carry out the port operations without consulting the state but do not forget — some of the pieces of land there are owned and belong to the state government,” Lim told reporters in George Town today.
The Bagan MP said the state executive council passed three resolutions during its meeting today — to reject the port’s privatisation, to demand Putrajaya dredge the port’s channel and to condemn Penang Port Commission (PPC) chairman Datuk Seri Dr Chua Soi Lek for “selling out” the rights of Penang folk.
An audio recording of the press conference was made available to The Malaysian Insider.
Lim said the state still believes that Penang port’s former glory could be restored and it could even be turned into an international port of call should dredging work be carried out properly and the government commits itself to pour funding and investments into the port.
“The federal government was supposed to spend the RM353 million... but it did not do so, saying since it is being privatised, let the company do it (dredging).
“But if you have no intention to make it into an international port, would you dredge properly? You may as well spend the money for your main port,” he said, referring to Syed Mokhtar’s Port of Tanjung Pelepas (PTP) in Johor.
Lim also revealed that the Penang government had penned a letter to Prime Minister Datuk Seri Najib Razak on December 2, 2010, expressing the state’s willingness to take over the privatisation process but the latter had not issued any reply.
“The state government has no part at all in this... there was no open tender, no consultation. The Penang government would not accept Penang port to be reduced to such a status, to be diminished to the level of being a feeder port, which is what Dr Chua and Tan Sri Syed Mokhtar are willing to let it become.
“Dr Chua, you have sold out the rights of the people of Penang,” he said.
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 crucial to making the port competitive.
The Transport Ministry had said in a written reply to a parliamentary question by Bukit Mertajam MP Chong Eng on Tuesday that negotiations with the company controlled by the logistics tycoon that runs Johor Port are currently ongoing.
The Penang-based DAP lawmaker, one of three who have accused MCA president Dr Chua 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 dredging work.
Responding, Lim had called Putrajaya “biased” yesterday for awarding the contract to Syed Mokhtar, saying that this confirmed his administration’s suspicions that the state was being sidelined in favour of Johor and was instead being turned into a feeder port.
“You won’t dredge to the required depth as required if you want to make it a main port, you have to make it at least 15 metres... then only the big ships can come in, but feeder port, you just main-main only-lah, you just do for show only, not a genuine dredging of the port,” he had said.
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 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.