Hand over Penang port, including ferries, to state government

The reduction in the ferry service is a betrayal of the public interest.

The Penang Forum Steering Committee is heartened that the federally controlled Penang Port Commission has requested the privatised Penang Port Sdn Bhd to postpone the plan to reduce the ferry service that was scheduled to take effect on 1 January 2016.

Only four ferries are in service now compared to a dozen ferries in the 1970s and 1980s. Even this skeleton service was due to be slashed, leaving just three ferries and shorter hours of operation – only for the move to be deferred.

We wonder why the port operations (including the ferry service) were privatised to PPSB in the first place when the Penang state government was keen on running the port.

In the past, the overall port operations were used to cross-subsidise the ferry service or handle any small losses that may have arisen from operating the ferries.

But PPSB, it would appear, is only interested in making profits from the port operations after the privatisation. It reportedly just announced that 2015 was a fairly good year as it handled around 1.3 million TEUs, a four per cent increase from last year.

So there is no reason why PPSB cannot subsidise any small losses (about RM20m) arising from the ferry service, especially given that fuel prices have dropped in recent years.

In this regard, why does the PPSB have its Annual Reports only up to 2012 on its website penangport.com.my? What about the reports for 2013 and 2014?

For the financial year ending 31 December 2011, PPSB broke even with a profit before tax of RM0.2m.

In 2012, the last year the PPSB Annual Report was published on its website, the port posted a loss before tax of RM16.0m.

An Edge report said for 2013 and 2014, PPSB incurred losses of RM19.4m and RM18.3m respectively.

For 2015, given the 4 per cent rise in volume, PPSB should break even or make a small profit even after loan servicing and after absorbing any losses from the ferry service. So why the need to slash the ferry service, which is an important public service relied upon by many? After all, a RM20m loss from ferry operations is not significant, given that the ferrries are an important mode of public transport and any loss can be easily absorbed.

Instead, PPSB appears to be doing all it can to discourage commuters from using the ferries. Its demoralised staff regularly warn motorists that they are in for a long wait – and many of these motorists then make a U-turn and take a longer drive to the Penang Bridge. Signboards warning commuters of the long wait were even placed outside the mainland ferry terminal recently. Queues of cars have been allowed to snake out beyond the ferry premises to further deter motorists from using the ferries even though there is ample space for cars to queue up inside the premises. Even the cruising speed of the ferries now appears slower.

What is stopping the federal government from handing over Penang port (including the ferries) to the Penang state government, along with the 30 water taxi licences that the latter has requested?

Politicking and vested interests should be put aside, and the public interest should be upheld. It is time for urgent tripartite meetings between the Penang state government, the federally controlled PPC and the privatised PPSB to be held immediately to discuss the handover of the port to the Penang state government.

Why should the privatised PPSB be allowed to keep the potentially lucrative port operations while neglecting and worse, scaling down, the loss-making ferry service, which may now be hived off to the state government? Isn’t that cherry-picking i.e. the privatisation of profits and the socialisation of losses? If PPSB cannot operate a decent ferry service, then the entire port operations should be handed over to the Penang state government.

In the meantime, the privatisation concession agreement between the federal authorities and PPSB should be made public. We would be interested to see if there is any clause in the agreement that obliges the PPSB to provide a satisfactory ferry service for long-suffering commuters. If so, the present unsatisfactory service would be in breach of that clause.

If there is such a clause and if PPSB is in breach of it, shouldn’t the agreement for the privatisation of the port be declared null and void?

Hand over Penang port (including the ferry service) to the state government.

Penang Forum steering committee
1 January 2016