Soi Lek says Penang Port sabotage claim ‘senseless’

KUALA LUMPUR, May 29 — Datuk Seri Dr Chua Soi Lek has rubbished claims by the DAP that he blocked a proposal to deepen the channel at Penang Port, saying it was a collective decision by the “whole National Economic Council” not to spend “hundreds of millions” just prior to privatising the debt-ridden port.

The Penang Port Commission (PPC) chief told The Malaysian Insider it “makes no business sense” for any private company to assume a debt of RM1.3 billion only to “purposely make the port fail” as alleged by DAP lawmakers from the island it controls.

Dr Chua said it did not make sense for any bidder not to improve the port’s performance. — File pic

“Why should the government spend when it should be done by whichever consortium wins the bid?” the former health minister asked in reply to questions from three Penang MPs from the DAP.

“The proposal was brought up but the whole National Economic Council decided if we are going to privatise it why spend a few hundred million to dredge?” he said, adding that “there has been a lot of talk” but the commission has not been informed of a winning bid as claimed by the DAP.

The three DAP lawmakers had accused the MCA president yesterday of blocking Putrajaya’s proposal to dredge Penang Port, which would allow bigger ships measuring 8,000 TEUs (twenty-foot equivalent units) to call on the island along the Straits of Malacca, the world’s busiest waterway.

Chow Kon Yow, Liew Chin Tong and Chong Eng claimed there was a “sinister” plot and conspiracy by Johor-born Dr Chua to stifle Penang’s economy to benefit his home state and relegate Penang Port to a feeder for logistics tycoon Tan Sri Syed Mokhtar al-Bukhary’s Tanjong Pelepas Port (PTP).

“Why did Dr Chua... reject the proposal to dredge the Penang Port channel during a meeting of National Economic Council, the government’s economic cabinet... on August 8, 2011?” they asked.

The Malaysian Insider reported in December 2010 that the Cabinet had approved the Ministry of Finance’s (MoF) sale of Penang Port Sdn Bhd (PPSB) to PTP despite competitive bids from other businessmen and also the Penang government, which owns the port land.

The three MPs said they understood that Syed Mokhtar may ask MoF to cut the final price for Penang Port to RM150 million from the initial RM450 million in exchange for the federal government to not dredge the northern channel which would save it RM350 million.

However, they did not disclose how they came by that knowledge.

Dr Chua also said it did not make sense for any bidder not to improve the port’s performance as “it is not doing as well as it should be and has accumulated a debt of around RM1.3 billion.”

“How will the new owner settle the outstanding debt without deepening the harbour? It does not make sense to assume the liabilities and not dredge. It only makes sense to DAP but it makes no sense to any businessman,” the former Labis MP said.

Penang Chief Minister Lim Guan Eng wrote to Prime Minister Datuk Seri Najib Razak in early December 2010 to put in a bid to run the port, which has declined since the MoF took over in 1994. The port lost its free-port status in 1974 but Najib’s Barisan Nasional (BN) is offering to give back its free-port status if the federal coalition regains Penang which it lost in Election 2008.

PPSB is a wholly-owned subsidiary of MoF Inc while the regulator, PPC, also reports to Putrajaya through the Transport Ministry.

It is learnt that cargo volumes at Penang Port have failed to match Port Klang and Tanjung Pelepas, growing only 5.8 per cent a year between 1995 and 2009, against Klang which grew 14.2 per cent annually.

Tanjung Pelepas Port began in 1999 but now handles more than six million TEUs a year, six times more than the one million TEUs in Penang.

Penang has complained that federal ownership of the port operator has worsened its financial position, with net debt rising from RM148 million in 2004 to RM832 million in 2009 — a 462 per cent increase in five years.