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Terminal operator
Penang Port Sdn Bhd (PPSB) can finally move forward with plans to
privatise and float its shares on Bursa Malaysia as it looks set
to hive off its loss-making ferry operation to state
infrastructure company Syarikat Prasarana Negara Bhd.
It is understood that Prasarana is ready to take over the ferry
operation pending approval from the Prime Minister's Department. A
takeover is expected this year.
The ferry service between Penang island and Butterworth 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.
"The listing of PPSB will most likely go through this time. In the
past, PPSB wasn't able to do so because of the loss-making ferry
service, which the approving authorities believed could make the
company's IPO (initial public offering) unattractive to the
public," a source close to the situation told Business Times.
PPSB's former chairman, Datuk Abdul Latif Abdullah, and automotive
logistics provider Konsortium Logistik Bhd were previously
reported to have expressed interest in taking over PPSB.
PPSB has been harbouring hopes of hiving off its ferry operation
as early as 2004 as it has been dragging down the company's
overall profits from day one. The problem lies with its fares,
which are said to be too low.
In an interview with Business Times on August 23 2004, Abdul Latif
spoke about a plan to hive off the ferry operation to the
government but still run it for a fee.
The move was likened to the 2002 Widespread Assets Unbundling
exercise of Malaysian Airline System Bhd (MAS), which saw
Penerbangan Malaysia Bhd take ownership of the national carrier's
non-profitable domestic operations.
However, the plan fell through.
The public ferry service was absorbed into PPSB as part of its
corporatisation deal with the Penang Port Commission (PPC) in
January 1994.
"PPSB and PPC will have to revisit the agreement so that the
government will totally be in control of the ferry operation. But
it (Prasarana) cannot run the ferry on the current tariff
structure because it will lose money," said the source.
Passengers pay RM1.20 each, while the fare for a car is RM7.70.
"Previous calculations have shown that the fare the operator will
have to charge to break even is RM3.20 per passenger," the source
added.
Still, it is unlikely that Prasarana will be able to raise ferry
fares once it takes over as that will generate fierce opposition
from the public.
"The government is more likely to inject funds to subsidise the
ferry operation," the source said. |
