New bidder enters race for Penang Port

A new bidder has entered the race for the stakes in the privatisation of Penang Port after tycoon Syed Mokhtar Al-Bukhary and, more recently, the Penang state government, now governed by the opposition Democratic Action Party (DAP).

According to executives familiar with the matter, a consortium led by Malaysian and mainland Chinese companies submitted a US$159.71 million bid to Prime Minister Najib Razak in October to acquire the port outright from the federal government, reported Business Times Singapore.

The proposal, however, allows the government a golden share in the port's equity structure.

The joint venture - 51:49 Malaysian-Chinese - called Oriental Pearl Harbour would be led by Malaysian businessman Siew Ka Wei and national Chinese shipping line China Ocean Shipping Company (Cosco) on the Chinese side, according to the executives.

But what makes the proposal interesting - and different from the other bids - is that it does not seek any form of financial assistance from Kuala Lumpur. For example, the proposal pledged to dredge the port's new North Channel without recourse to the already-budgeted-for $102.85 million under the Ninth Malaysia Plan. The Malaysian-Chinese joint venture has also pledged to build a new shipyard, reclaim land, extend berthing facilities, upgrade infrastructure and build new storage facilities, including one for hazardous materials, for close to $1.18 billion.

"There will be foreign direct investment, job creation and more business opportunities especially in Penang,'' the proposal emphasised.

The new offer illustrates the interest shown in the port, not just by Malaysian businessmen but by foreign multinationals. The latter isn't uncommon though: Westports is 30 per cent owned by Hong Kong tycoon Li Ka- shing while the Port of Tanjung Pelepas (PTP) has foreign shareholders in the form of Denmark's Maersk and Taiwan's Evergreen.

The new bid is also a refreshing change from the usual privatisation bids that have inevitably featured lopsided agreements in favour of the bidder or various forms of government financial assistance requested by the promoter. It is also higher than the estimated $153.32 million bid submitted by Syed Mokhtar. It isn't clear, however, how much the Penang state government offered for the port.

According to the executives, the consortium has other shareholders including Malaysian private firm PFI Marine led by retired admiral Ramly Abu Bakar and businessman Rosli Latif.

Meanwhile, the Chinese comprise four major mainland corporations led by Cosco. The executives said the consortium would raise $1.28 billion in total funding.
(source:www.cargonewsasia.com)