Penang Port and federal-state relations


Big plans are in store for Penang Port, it would seem. But the Penang state government does not appear to have been kept in the loop.

Penang Port was ‘privatised’ in 1994 to Penang Port Sdn Bhd (PPSB) as the terminal operator, which comes under the federal Finance Ministry. The Penang Port Commission (PPC), on the other hand, continues to exist as a regulatory port authority under the Transport Ministry. Now, PSPB has major plans for a free commercial and industrial zone within the port area, a halal hub and a ‘tank farm’. (These activities may also entail massive land reclamation on the mainland – what is the environmental impact? – north of Butterworth.)

What is the impact of all this on the state government’s own plans for a halal hub and on the existing free trade and industrial zones elsewhere in Penang? From what I hear, there has been no consultation between Penang Port and the Penang state government (you know, the state government elected by the people of Penang and that is answerable to them) on these expansion plans.

Who gets to approve the land reclamation for the tank farm on the mainland? The larger question for the longer term is, shouldn’t the port of Penang come under the state government’s jurisdiction?

Is the federal government trying to by-pass the Penang state government in the development process through

  • the plans for Penang Port that go beyond simple port expansion;
  • its allocation of heritage conservation funds via the Finance Ministry;
  • mega-projects such as Penang Sentral;
  • the dubious Botanic Garden projects; and
  • the Penang Hill Railway ‘upgrade’

in effect creating a parallel administration in the state that falls outside the purview of the Penang State Assembly? Thus, it makes it difficult for the people’s elected reps in the Assembly to scrutinise the spending of such big money (which, in certain cases like Penang Sentral, could be more than the entire annual budget of the Penang state government).

This article from the Business Times:

Potential to return to glorious trading days

By Marina Emmanuel

[email protected]


Potential investors have approached Penang Port to set up shop in the port area to tap the export potential of the Indonesia-Malaysia-Thailand Growth Triangle

IF A PLAN by terminal operator Penang Port Sdn Bhd (PPSB) to bring in fresh investments to Penang by way of a halal industrial park and petroleum tank farm is realised, multiple benefits can expect to be accrued by the state.

Apart from the potential of creating new jobs and opening up new investment avenues, the role of Malaysia’s oldest port – Penang Port – has the potential to see the return of its once-glorious trading days.

The history of the port can be traced to a vibrant hive of activities, until its status as a free port was revoked in 1969.

Since then, Penang Port had remained under the maritime radar and lost out to competition from other ports.

The fact that the port had to adhere to corporatisation policies for a while, has also not helped the situation.

Penang Port is managed and operated by PPSB, a corporate entity set up under the government’s privatisation policy.

One of the port’s uniqueness is its ferry service, which links George Town on the island to Butterworth across the channel, with PPSB operating a fleet of ferries.

PPSB chairman Datuk Seri Dr Hilmi Yahaya revealed recently that potential investors have approached PPSB to set up shop in the port area to tap the export potential of the Indonesia-Malaysia-Thailand Growth Triangle.

Plans are also in place to house a free commmercial and industrial zone within the port area to facilitate easier movement of goods.

The authorities are said to be looking at reclaiming some 400ha of land south of the Butterworth port to house the proposed activities.

While the tank farm is expected to bring in RM1 billion in investments, Dr Hilmi said the proposed halal hub can rake in an estimated RM500 million.

He also said that other investors – like those engaged in liquid crystal display production – have expressed an interest to site their manufacturing operations at the port area so they can ship out their goods seamlessly.

By thinking out of the box and unlocking the potential found at the port and its surrounding areas, nailing the right investors and mapping out the right strategies and re-engineering its current operations, the port can serve as the catalyst in boosting the state’s economy.

Apart from Penang, other beneficiaries of the port’s proposed expansion can include the states of Perlis, Kedah and Perak, which together with Penang come under the Northern Corridor Economic Region (NCER).

The NCER blueprint, which was unveiled three years ago, identified Penang as the “Gateway to the Northern Corridor” and the role identified for the state was that of a major logistics and transportation hub.

Under the logistics services sector of the blueprint, projects were mapped on developing the economic corridor to be a major processing centre and entreport port for the area.

For this purpose, the Penang Port was designated as the leading port in northern Malaysia.

With positive indication received from the federal government for the port’s RM350 million request to carry out capital dredging works under the 10th Malaysia Plan, the proposed expansion of the port is now poised to shift from its role as a feeder port to one of a mother port.

Apart from catering to its hinterland, the proposed activities of the port will also be able to see increased economic activity not only within the Indonesia-Malaysia-Thailand Growth Triangle, but also with ports on the Indian sub-continent.

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Loyal Penangite

Dear Anil, Few days ago, I just happened to read the federal constitution for time passing. Sadly, you have make a mistake. Port authority is under the jurisdiction of federal government. Your question on “The larger question for the longer term is, shouldn’t the port of Penang come under the state government’s jurisdiction?” will need a amendment of the constitution. However, I do support your view on this manner, and hope that it can be on the concurrent list so that Penang port is not sacrificed for Port Klang, just like how Penang airport being neglected to help the development… Read more »

Robert Teh

Anil, Sometimes I wonder if your readers really understand the meaning of what you wrote. Even a straight forward article can come across as being “biased” against a particular party. For heaven’s sake, social commentators (like Anil and many others) are only trying to promote a less corrupt, more fair and just society for the people of this country. Don’t be blinded by political affiliation or ambition – no political party in itself is perfect or a true savior of the people. Most politicians are in politics for the money or personal interest but however there are some exceptions (and… Read more »


“At the end of the day – aren’t we all Malaysians?”
I’m not, but your comment is the most sensible one I’ve read in a while and makes continuing to live here seem that little bit less unattractive. Thanks.

Gerakan K

Well, are you permanent resident of Malaysia ??? Or an expat ???


I’m a ‘visitor’: my wife and children are Malaysians. I sometimes wonder what difference Malaysians think it makes to someone who lives here permanently (as permanently as possible, on a visit pass) that they’re not actually Malaysian. I’m sure there are people in Malaysia who can afford a residence in each of the countries their family members have a passport for, but I’m not one of them. Malaysia is my home. I’m just like a Malaysian – only with a few less advantages!


Robert Teh,
The Deputy PM is not and so is UMNO. They are Malay first. This is what UMNO is trying to do. Divide and rule. Soon they (may) discard MCA, Gerakan and others if they could get PAS to join them. Fortunately PAS is more sincere towards their coalition PR.
Now the only way to make a truly sincere Malaysian party is PR and to do that we must KICK UMNO & Najib out.

Gerakan K

Let’s talk on divide and rule. PR tries hard to mimick BN formula by DAP seeking the chinese votes, PAS for malay votes and PRK for non-malay votes. During GE 12 it was PAS that failed in the planned strategy. Also PR lacks indigenous parties in Sabah and Sarawak. But in recent PR’s version, they invite SNAP into its coalition in order to seek the local votes. If we see it in totally, PR is the weaker version of BN. So, when people talking about the chances of PR capturing the Putrajaya, I can’t but to give them a big… Read more »


In fact at the last GE, PR has already won the most seat in Peninsula Malaysia. It is only Sabah and Sarawak that save the BN. With Sabah and Sarawak now in bickering, and the coalition especially MIC, MCA and UMNO fighting against each other, there is a good chance for PR to crack open Malacca, Perlis, Pahang, Negri Sebilan and Johore. The 5 states captured last GE should be PR for keep again. Its all very clear that the latest sentiment has now shifted to PR again after the (luring) of the 5 MP and the most despicable act… Read more »

Human Race

This joker still does not know that under the guise of the sand mining issue in Selangor, UMNO is (allegedly) actively and secretly wooing DAP! PAS had taken the lead and told UMNO in no uncertain term that if UMNO want Malay unity, join Pakatan Rakyat!

Gerakan is still hanging on to UMNO hoping that they can still cari makan. UMNO is sinking and fast! Gerakan, MIC, MCA will be history and clinging on to the last straw!


DAP getting Chinese votes? What are you thinking?

DAP will only get machai votes, and 99.9% of the Chinese in Malaysia are not machais.

Last election the Chinese were voting for PR not DAP.


Read the first reply fro raj. Read it, and see how that reader raj is accusing the Penang Port Authority of not “respecting the wish of” Lim Guan Eng. Reader raj also uses words like “blatant disregard of law” as if the Penang Port Authority has blatantly disregard the laws. All points back to Mr. Anil’s reporting. There is a spat between Lim Guan Eng and the Penang Port Authority, sure. But it is a spat about something that is so abstract even kindergarten kids would laugh at. Mr. Anil, if you would want to be a true journalist, be… Read more »


The spat between LGE and the Penang Port Authority is a big nothing.

There are plans, yes. There are a lot of plans. But just as a lot of other plans they are not implemented, including the “reclamation”, Mr. Anil.

Which leads to this – your report is biased, Mr. Anil.

Get to know the issue first before you accuse anyone.


Before anything is done, please respect the wishes of the state government. Time and time again, you can such blatant disregard of law – no building plan approval at the RMAF at Jalan Geh Chong Keat; this PPSB plan…what is the intention of the federal government. As long as this is being done, Penangites will see it as a threat and will vote against BN. So don’t push your luck , BN