We are not a sinking ship, says Penang Port Sdn Bhd

GEORGE TOWN: Penang Port Sdn Bhd (PPSB) says it is not poorly managed nor in dire need to be privatised, despite having to operate under numerous constraints.


PPSB, which manages Penang Port, the country's oldest port, claimed that it had received no fresh capital injection, grants or any form of government assistance.

PPSB is a wholly-owned unit of the Minister of Finance Inc.
"We are not a sinking ship. In fact, we are poised to grow if we can continue with the five-year growth plan that we kicked off last year, which was endorsed by our owners.

"We expect to break even by 2015," said PPSB chief operating officer Obaid Mansur.

Business Times in a report earlier this week cited logistics experts as saying that the privatisation of Penang Port was needed as a last-ditch attempt to prevent it from going under.



Obaid said the tendency by some quarters to compare Penang Port with its competitors such as Johor Port was unfair.

"Our employment costs in 2010, for example, was RM108.76 million to cover 1,767 employees while Johor Port spent over RM50 million for some 800 employees.

"Unlike other ports in the country, we have been subsidising the losses of our ferry operations since 1994 (when we took over from the Penang Port Commission) to the tune of RM190 million," he said.

Last year, the ferry operations suffered losses of RM16.3 million. This year, the losses are expected to narrow to RM15.7 million.

He said PPSB was working with several banks to refinance its RM1 billion loans.

"In 2008, we had requested for a RM200 million capital injection from the government to start our North Butterworth Container Terminal (NBCT) expansion but until today, the funds have not been forthcoming.

"We needed to fund the project at the time and opted for bilateral loans," he added.

Obaid also raised the issue of the RM350 million allocation that was pledged by the federal government for it to carry out capital dredging works at the port.

He stressed the urgency to increase the depth of the port to improve its role.

The north channel dredging from its current 11.5m depth to 14.5m, was supposed to have been carried out between 2010 and this year to serve main line operators at the port.

"We have never been in a negative cash flow situation and, in fact, we are in RM100 million cash flow positive," Obaid said.
He also expressed concern on how the planned privatisation of Penang Port would impact the Northern Corridor Economic Region blueprint, crafted more than four years ago.

The blueprint is to position Penang Port as the leading port in northern Malaysia and the premier Indonesia-Malaysia-Thailand Growth Triangle port.

"The port management has been working with the Northern Corridor Implementation Authority to develop new strategies to position ourselves more aggressively for growth via improved efficiency and security and our five-year plan is tied to the NCER blueprint," he said.

Obaid said in 2006, 26 per cent of the vessels calling at Penang Port were direct call vessels. The figure is expected to grow to 55 per cent this year.

"With the current global and technology changes, we are set to accommodate even bigger volume. However, all these will hinge on how soon we get the capital dredging going," he added.