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Terminal operator Penang Port Sdn Bhd (PPSB) can
finally move forward with plans to privatise and
float its shares on Bursa Malaysia as it looks
set to hive off its loss-making ferry operation
to state infrastructure company Syarikat
Prasarana Negara Bhd.
It is understood that Prasarana is ready to take
over the ferry operation pending approval from
the Prime Minister's Department. A takeover is
expected this year.
The ferry service between Penang island and
Butterworth has been a major hindrance to
state-owned PPSB's listing plans in the past due
to the losses incurred, running into some RM13
million to RM15 million a year.
"The listing of PPSB will most likely go through
this time. In the past, PPSB wasn't able to do
so because of the loss-making ferry service,
which the approving authorities believed could
make the company's IPO (initial public offering)
unattractive to the public," a source close to
the situation told Business Times.
PPSB's former chairman, Datuk Abdul Latif
Abdullah, and automotive logistics provider
Konsortium Logistik Bhd were previously reported
to have expressed interest in taking over PPSB.
PPSB has been harbouring hopes of hiving off its
ferry operation as early as 2004 as it has been
dragging down the company's overall profits from
day one. The problem lies with its fares, which
are said to be too low.
In an interview with Business Times on August 23
2004, Abdul Latif spoke about a plan to hive off
the ferry operation to the government but still
run it for a fee.
The move was likened to the 2002 Widespread
Assets Unbundling exercise of Malaysian Airline
System Bhd (MAS), which saw Penerbangan Malaysia
Bhd take ownership of the national carrier's
non-profitable domestic operations.
However, the plan fell through.
The public ferry service was absorbed into PPSB
as part of its corporatisation deal with the
Penang Port Commission (PPC) in January 1994.
"PPSB and PPC will have
to
revisit the agreement so that the government
will totally be in control of the ferry
operation. But it (Prasarana) cannot run the
ferry on the current tariff structure because it
will lose money," said the source.
Passengers pay RM1.20 each, while
the fare for a car is RM7.70.
"Previous calculations have shown that the fare
the operator will have to charge to break even
is RM3.20 per passenger," the source added.
Still, it is unlikely that Prasarana will be
able to raise ferry fares once it takes over as
that will generate fierce opposition from the
public.
"The government is more likely to inject funds
to subsidise the ferry operation," the source
said.
Source: NST |
