Is BN led federal government trying to stifle Penang’s overall economy?

Media conference statement by Chow Kon Yeow, Liew Chin Tong and Chong Eng on 28th May 2012 in Komtar, George Town, Penang:


Is there a conspiracy to stifle Penang’s economy through privatisation of Penang Port to Tan Sri Syed Mokhtar al-Bukhary who will turn it into a feeder port for his Tanjong Pelepas Port (PTP)?

New evidence suggests that there may be a conspiracy to stifle Penang’s overall economy and industrial prowess through privatisation of Penang Port to Tan Sri Syed Mokhtar al-Bukhary, who will turn it into a feeder port for his Tanjong Pelepas Port (PTP).”


It is understood that Minister of Finance Incorporated (MOF Inc.), owner of Penang Port Sdn Bhd (PPSB), has privatised its ownership of PPSB to Seaport Terminal (Johore) Sdn Bhd, a company owned by Tan Sri Syed Mokhtar al-Bukhary, in the name of “Gelombang Kedua Penswastaan” (second wave privatisation) of MOF Inc. subsidiaries.

The Public-Private Partnership Unit (Unit Kerjasama Awam-Swasta, UKAS) of the Prime Minister’s Department invited several unnamed companies to submit bids and chose Seaport Terminal (Johore) Sdn Bhd, which was endorsed by the Cabinet on 25th November 2011.

On 29th March 2012, Finance Ministry confirmed that Seaport Terminal (Johore) Sdn Bhd was initiating a due deligence process on PPSB while in the final stages of completing the Sales and Purchase Agreement with MOF Inc. In the meantime, UKAS is preparing an extension of Penang Port’s concession.

Penang Port Sdn Bhd’s thirty-year concession which began in 1994 would end in 2024.

Why Tan Sri Syed Mokhtar’s involvement would hurt Penang’s economy?

PPSB’s website suggests that Penang Port is “to be the premier port and logistics chain integrator in the region.”

Deputy Prime Minister Tan Sri Muhyiddin Yassin suggested in April 2010 that a plan to dredge the port “complements Penang Port’s RM1.1. billion investment pledged under PPSB’s expansion and business improvement plan 2008-2012 to cater for the development brought on by the Northern Corridor Economic Region (NCER), thus enhancing its attractiveness as the port of call for the northern region and possibly the Bay of Bengal.”

Penang Port is located at the centre of the international maritime route, making it a natural transhipment hub. It is a waste not to utilise this geographical advantage.

It also means that the bigger the vessel that calls on Penang Port, the cheaper the slot cost/freight is. For example, if Penang Port manages to attract a vessel on its way from China to India/ Middle East or vice versa, the cost is even more competitive.

Therefore, investors may not want to build more manufacturing facilities in the northern region if the freight cost is high, as a result of Penang Port being downgraded to become a feeder port for PTP in Johor.


For Penang Port to receive calls from bigger vessels – from 4000 TEUs (twenty-footer equivalents) to 8000 TEUs per vessel – the port needs to be dredged from its current 11 meters to 14 meters.

Tan Sri Muhyiddin  announced in April 2010 that the RM351 million dredging scheme of the Penang Port Channel which was shelved during the mid-term review of the Ninth Malaysia Plan would be made a priority in the 10th Malaysia Plan.

Under PPSB’s RM1.1 billion investments, seven units of Super Post Panamax cranes were bought to cater the 8000 TEUs vessels, which can only enters the port if it is dredged.

It is strange if the government approved the purchase of the cranes but did not dredge the port.

What Tan Sri Syed Mokhtar plans to do?

It is understood that Tan Sri Syed Mokhtar-owned Seaport Terminal (Johore) Sdn Bhd may do the following measures which are not only detrimental to Penang’s interests but caused economic woes for the state.

  1. Seaport Terminal may request for the final price of the Penang Port to be reduced from RM450 million to RM150 million, in exchange for the Government NOT to dredge the Penang Port Channel that would cost RM350 million;
  2. As Tan Sri Syed Mokhtar also owns PTP and Johor Port, there is a plan to rationalise the two ports, which means closure of container port of Johor Port. Seaport Terminal may bring the seven units of Super Port Panamax cranes from Penang to PTP and may bring the six quay cranes in Johor Port to place it in Penang. Essentially, Seaport Terminal may potentially engage in asset stripping.
  3. And since the smaller cranes are unable to handle the 4000 TEUs and above vessel, hence Seaport Terminal may not dredge the Penang port eventually.





Questions for Najib

  1. Can Datuk Seri Najib Razak, as Prime Minister and Finance Minister, confirm or deny Tan Sri Syed Mokhtar’s plans?
  2. Why must Penang Port be privatised?
  3. Why was there no open tender in the privatisation of Penang Port Sdn Bhd? (The Penang State Government has offered to purchase the port).
  4. Why wasn’t the dredging of the Penang Port Channel done despite repeated promises by the Federal Government under the 9th and 10th Malaysia Plans?

Question for Chua Soi Lek

  • Why did Datuk Seri Dr Chua Soi Lek, as Penang Port Commission Chairman, reject the proposal to dredge the Penang Port Channel, during a meeting of National Economic Council, the government’s economic cabinet of which Chua is a member, on 8th August 2011?

Questions for Teng Chang Yeow

  1. We have been asking Penang BN Chairman Teng Chang Yeow to state his stance on the privatisation of the Penang Port by Tan Sri Syed Mokhtar.  Teng’s reply was that it was not within his purview. Does he know that plans by Tan Sri Syed Mokhtar and Seaport Terminal will stifle the growth of Penang Port and hence Penang’s economic growth and industrial prowess?
  2. If Teng doesn’t know, why does he keep on talking about the peaking of the manufacturing sector and the need for Penang to move away from manufacturing industry? Is he preparing Penang for a disastrous future as a result of the demise of our port?

If there are no concrete and serious answers from these BN leaders, it can only confirm a sinister conspiracy is in the making to stifle Penang’s economy and industrial prowess.


Chow Kon Yeow is MP for Tanjong and State Exco for Local Government and Traffic

Liew Chin Tong is MP for Bukit Bendera

Chong Eng is MP for Bukit Mertajam

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