Penang Port attracts foreign suitors

The race for control of Penang Port is heating up, reported The Edge Malaysia.


In addition to the current proposals by tycoon Syed Mokhtar Al-Bukhary and Oriental Pearl Harbour – a consortium led by Siew Ka Wei – two foreign parties have joined the fray to take over the port, sources say.


One of these is DP World, one of the world’s largest marine terminal operators. DP World is Dubai World’s port operations arm.


It is learnt that DP World has expressed its interest in Penang Port to the Malaysian Industrial Development Authority (MIDA), but it is uncertain if a formal bid has been submitted.


The other contender in the tussle for Penang Port is believed to be a consortium made up of an India-based company and the Pahang royalty. However, details about the parties and their proposals are scarce at the moment.


The Penang government has also reportedly made a proposal to the federal government to acquire Penang Port. Chief Minister Lim Guan Eng said the state government would be ready to offer equity interest to foreign partners if required.


However, the federal government has yet to decide on any of the offers. This decision lies with Unit Kerjasama Awam Swasta (UKAS), which will be handling the privatisation of the port.


The Penang Port is managed and operated by Penang Port, wholly owned by the Ministry of Finance. The ministry took over all facilities and services from the Penang Port Commission in January 1994 as part of a privatisation plan.


It is said that the performance of the port was not up to par due to inefficiencies. The port’s profit in 2009 was US$25.25 million and port managing director Ahmad Ibnihajar said the port could see lower profit in 2010, estimated at about $13.16 million, owing to lower tax incentives. Ahmad added that depreciation would also bring down its profit in 2011. But with a tariff increase due in 2012, the port’s profits are expected to improve after 2014, he said.


The keen interest shown by various parties to take control of the port is a clear indication that many see the port as a viable and profitable venture. In 2010, the port breached the one million TEU barrier. It is targeting a throughput of two million TEUs in the next five years.


Penang Port is ranked No 3 in the country after Port Klang, comprising Northport and Westports, and Port of Tanjung Pelepas (PTP), which is controlled by Syed Mokhtar.
(Source:http://www.cargonewsasia.com)