NO to Penang Port privatisation

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I don’t know about you, but I got that sinking feeling when I heard that Penang Port could be privatised.

At present, Penang Port comes under the federal Finance Ministry. The government reportedly has already spent RM1 billion over the last five years to upgrade Penang Port.

Now the news is that Malaysia’s seventh richest man, Syed Mokhtar Al-Bukhary, could take over the port, as reported in the Singapore Business Times. Just how many ports do they want him to take over? His MMC already controls Port of Tanjung Pelepas and the Johor Port in Pasir Gudang.

Surely ports are strategic assets that should remain in goverment/public hands. Remember that the successful Singapore port is government owned.

If Penang Port is not being run efficiently enough, then just hire more qualified and competent managers.

Read this argument against the privatisation of ports from Business Line, the financial daily of the Hindu group:

`Privatisation does not promote the interests of ports or the country’ — Mr K. V. A. Iyer, Vice-President, Water Transport Workers Federation of India

V. Sajeev Kumar

THE WATER Transport Workers Federation of India, one of the five major federations representing port and dockworkers in the country, is spearheading the agitation against privatisation of ports. Mr K. V. A. Iyer, Vice-President of the Federation, spoke to Business Line on the views of the Association against transferring of public assets to private players for operating container terminals through BOT (build-operate-transfer) route. Mr Iyer, who is also the Working President of the Cochin Port Labour Union, strongly opposes transferring of ownership or control of ports to multinational companies.

Excerpts from the interview:

How do you view privatisation of ports, in general?

By privatisation of ports, we infer that ownership or control or both of a public port asset is transferred to private entrepreneurs.

The ports are unique public assets with inherent right to public access. There is need for caution in transferring such public assets so that public interests do not get jeopardised.

Ports are natural public assets and must remain in the public domain, as they are key to national security. In case of a war, the first targets are ports. Naturally, such strategically important assets must always be under the control of a public authority.

It is perhaps time for a policy shift in the port sector. Do you have any suggestions on the need for Indian ports to keep pace with similar facilities elsewhere in the world?

We cannot keep aloof, lest we are left out. But the findings of a recent study by International Association of Ports and Harbours (IAPH) suggest, “Although the influence of private sector actors in ports is growing, the role of public sector agencies also remains significant.”

Public authorities control most ports in the United States as also in the European Union. The major share of investment for ports in advanced countries comes from public funding.

Such flow of public funds in European ports has become controversial and led to disputes among EU members because such public financial support deters competition and free access that Maastricht Treaty — the EU’s foundation — guarantees.

The EU has passed a law to look into the public subsidy that goes into ports sector in Europe to determine whether they are consistent with the Maastricht Treaty. The ports provide service to facilitate international trade by shipping.

World-wide, the private sector is recognised as an efficient provider of service. So, is the private sector not most appropriate to operate ports?

Singapore is a public port authority. In terms of efficiency the port is world-class. In Kochi Port, the Dubai Port has secured the concession to operate RGCT.

This Port has entered into contract to build and operate ICTT at Vallarpadom Island of Cochin port.

Dubai Port is said to have acquired CSX Terminals world-wide. There are models for everything. One model doesn’t fit all.

How will it be possible to raise the Rs 50,000-crore investment required for the port sector for the next 10 years without involving the private sector?

The objective must be very clear. If the Government does not have adequate resource to invest in ports, alternatives must be looked at. In that case the government should invite competitive bids to quote highest revenue share from prospective entrepreneurs. If the intention is to ensure efficient port service, parameters of efficiency must be set rather than the revenue share.

For example, for a container port, benchmarks must be set for the number of moves per hour, the turnaround time, the rate of user charge, and so on supported by credible performance guarantee.

However, this is not how port concessions are awarded in India. Here, most of the pre-bid meetings take place between the port authorities and prospective bidders. The bidders are encouraged to set as many conditions as they feel like.

All such demands are later incorporated in the bid document as if the public port authority set them. It will ultimately result in a container shipping interest cornering almost all major ports in India for its service. Such privatisation merely helps the shipping line to promote its interests and not that of the ports or the country.

So what you oppose is not privatisation per se, but to the method and means of inducting the private sector in ports?

Only the Government can be in charge of some functions, for example police, defence, ports and so on. The Government has to find the money to invest in these sectors. It is not good to entrust these functions to the private sector because there is no money.

In the globalised environment, the role of government is waning while that of the private sector is waxing? Is not privatisation desirable from this point of view?

The roles of governments are not shrinking under the globalised environment. The question is whether everybody in the world accepts globalisation.

There is growing opposition to globalisations from a large number of people because its benefits accrue to a very small section in society. There is demand to make the economy more inclusive so that no one is left out.

Globalisation is not just free trade in goods and services and its rules are set by the World Trade Organisation. The significant thing is that the maritime sector that includes ports and shipping did not come within the scope of the WTO. That means the governments are not obliged to allow free entry of maritime services.

The main opposition against inclusion of maritime service under the WTO was from the United States. The US wanted to continue with highly subsidised shipping service and ports so as to provide inexpensive service to its exporters who could then capture the world market.

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Danial

actually Penang port should manage by penang state government,which is elected by the Rakyat of Penang,not by the umno putras… By the way,Penang port should link with Songkhla port by rail n highway to meet the east and west cargos n containers,this can save 5-7 days trip avoid Melaka strait,Penang port will again become the most important port than Klang n Singapore port.But this must run by the efficient body not the money sucker n unefficient umno putras.

reef

penang port cater northen malaysia & southern thailand………penang port receive 40% of revenue from
southern thailand. a lot money and revenue the port earn
by this activity, so taht penang people and north malaysia people get ready to have an big demo on this,if our malaysian government if sell this port to an individual company.

reef

not only that,penang port also manage by an stupit guy like dato ahmad ibni haja, he is an politicion, not an logistics man, how can an non logistics back ground guy manage penang port, that are the reson why penang port not doing good. the current expention of penang port have been spend almost 600 million on wharf/berth( do u thing the cost can reach that ammount)and also why our malaysian goverment giving money makeing machine(penang port) to an individual company??????????????????????????? they just anous that penang port have reach 1 million teus and hope by 2012 to reach more then… Read more »

reef

penang port should maintained as public and operate by malaysian government or an cooperative organization and not by an individual or an private company. why should malaysian government/federal should sell/change management to an individual company. Now this penang port operate by MOF benefit all penang community and other northern region trader.if the Private company take over the management,the wealth from penang port only Chanel to an individual person.now the wealth shareed by all northern region community by ( forwarding company,shipping company,transport company,container broker,warehouse broker,stevedore company,port worker,small trader,and other port services and activity provider) who earn leaving around northern region if… Read more »

PPSB

ask former ppsb chairman dtk seri zahrain.

PPSB

ask former ppsb chairman dtk seri zahrain. y no open tender for ppsb privatation.

Danial

petty to the disable,sick person and senior citizen who have force to walk such a long way and uphill to get the ferry,federal govt n ppc,no sympatize about ‘Rakyat’ but care for their UMNO putra pocket such as syed mokthar,privatize sure rob Rakyat money by rising the fare,13th election as soon as corner,we rakyat ‘1 Malaysia’ sweep the BN(Bank Niaga)to Klang river,don’t forget kita ‘Rakyat’lah Tuan dan Boss:hip hip horay!

AlbertG

limko 1 give me 5. We should change the federal goverment, That’s right and forget the rent seeker who is in dreamland.

kee

Yes, Anthony Tan is right, the people of Penang must protest.

We must not let privatisation happen to Penang Port !!!

Anil, cant we do something?

Kamal

Any information on ‘Think City Sdn Bhd’ that is managing the heritage fund for Penang?

tunglang

They are still ‘thinking’ which, how, how much and when to give out the variety of heritage funds for useful heritage conservation purposes. Take it slow, slow, slow ‘thinking’.
This in total contrast to what’s happening by private self-initiatives for Penang heritage conservation:
http://www.starproperty.my/PropertyGuide/Living/8049/0/0

ramalingam

IT IS O.K. THE FEDERAL GOVERMENT (MAY) HAVE CONSULTATED THE BARISAN REPRESENTIVE IN PENANG WHO LOST THE LAST ELECTION AND THEY AGREED TO IT. AS THAT IS THE WAY FOR THEM TO GET EVEN WITH THE PEOPLE THAT VOTED THEM OUT.MAKE PENANG PEOPLE SUFFER. MY BEST ADVICE IS CHANGE THE PORT CHAIRMAN AND THE WHOLE MANAGEMENT.

limko1

How to change the Port chairman and the whole management when they report to the Transport Minister and not the Penang state government?

Change the Federal Government is the only way to change the organisation such as Penang Port.

wandererAUS

Gerakan K’s dream came true or was it anticipated!…another public listing soon?. Hey, cherry picking creep, how many pink forms will you get?

Gerakan K

I will accept any “rezeki” whether it is free lunch or not.

What’s the problem ???

Don’t jealous OK !!!

By the way, I support the privatisation move as it will stimulate the economy and my pocket.

Ujang

That’s your best advertisement for BN, corrupted to the core.

tunglang

Experience tells a lot, my dear Ujang.
Especially from the corrupts to the core of indescribable.
What’s more to comment?

Pretty Obvious

Anil,

Take note. Gerakan K has confirmed what we have been saying all along. He IS a rent-seeker. Given the regime change on 308, he must be one of those who have fallen off the gravy train.

tan, tanjong bungah

Hi everyone,

One of the reasons BN representatives are appointed as federal coordinators in constituencies held by PR assemblymen and parliamentarians, as a conduit for federal funds to be dispersed, and to continue feeding their party cronies! Since Pg State is under PR administration, the ‘gravies’ have stopped flowing, and hence, the need for such federal coordinators to resume such gravies to BN’s, especially UMNO’s, members and cronies!

observer

Rent-seeking is truly a fine art and very addictive as well.

tunglang

Businesses and tax payers in Penang should learn the fine art of tax avoidance (which is legal) to stop the continuous flow of free money to the Feds. Then we will see how they continue the gravy train of free flowing and feeding of useless rent seekers in the state.
Then LGE should open the door to globalisation and we will witness the eventual effects on these spineless, unproductive, uncompetitive cronies and leeches to struggle in self-pity and wallow in their doomed dreamland.

wandererAUS

An act of desperation by these UMNO … creeps!…knowing they have no chance to recapture Penang, korek, korek, whatever they can lay their filthy hands on. This is the behavior of their second nature, DIRTY …!!

Ong Eu Soon

Piratisation of the best of the best! Only available in Bolehland.

samedi

Penang was once a free port. To spite the Opposition government of Penang, the status was taken away and awarded to – of all places – Langkawi. How much has the nation lost as a result? Will the status now be given to the annointed one?

Anthony Tan

If the federal government cannot support the Penang Port financially due to poor management, it is hightime for the Penang state government and the people of Penang to start a campaign to contribute to a public funding to takeover the Penang Port. Penang Port should not be killed TWICE (first time was when Penang loss the Free Port Status when then Gerakan was the opposition and now DAP as the opposition – history is repeating itself). Penang Port should not be treated like a football to be kick around, it is a lifeline of the state. After taking over, engage… Read more »

AgreeToDisagree

Anti-Trust and Anti-Monopoly laws should be levied to prevent this sale *OR* if not yet written must immediately be written. Then there is the issue of (alleged) government (DAP) collusion with Syed Mokhtar Al-Bukhary. There (could be) an element of treason and unconstitutional behaviour in this sale that could be brought up and punished by the highest authorities. Malaysia’s sensitive areas such as ports (and Oil Blocs), belong to the Rakyat *NOT* a handful of politicians to sell off, and also *NOT* plutocrats, self made, and most especially not – corrupt plutocrats. Syed Mokhtar Al-Bukhary is causing conflict of interest… Read more »

AgreeToDisagree

Still getting bearings in this arena of commentary. Have no time to research everything before commenting.

Thx for the correction, in this case replace all the words ‘DAP’ with ‘Finance Ministry’ then.

fidel castro

please see what happen at kuantan port. the operator j(allegedly( ust by two secondhand gantry crane aged 25 years old.how to compete with terminal? it is call privatisation?

aca

anil,

this fella has taken over the role of Halim Saad. Whats the connection with UMNO? password to everything. Is he fronting for UMNO?

kingkong

Now the Penang Government face the forced eviction, sapul by the Gerakan/Umno developers. People like Ong, DAP=UMNO, Pearl, K, Gerakan K are all very happy…

tunglang

That is what 1-Malaysia is about. 1 Albokhareee owns all sea ports.1-somebody owns all LRT. 1-smart alex owns all online networks. 1-this, 1-that will all be very, very rich in no time while the rest of 1-Malaysia happy fools will stay the same or degrade into Zimbabwe-class ‘bottom A-1’ citizens in 2020.

Jalil Din

That’s why NEP failed – only selected malays got rich and richer, and they in turn do nothing to help their community.

If the 30% malay equity is raached, very likey 90% of the 30% is owned by the chosen few like Albokharee. As most malays will each own at most about RM100 worth of amanah saham nasional.

tunglang

Very sad for our Malay brethrens some of whom were sidelined from the wealth creation, preferential assistance and economic cake supposed to be shared among all Malaysians. Because of greed, this selective enrichment is happening to the Malays as well. Very sad indeed.

Yang

Used our money to upgrade and then pass it to one of their cronies. We really must kick out that Najib and UMNO together with their impotent MCA, MIC and Gerakan

Nur Melodi

No open tender?