Penang Port Listing to see light of day

From The Business Times:

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.

Stories like these give me hope that Malaysia is starting to move to a more forward looking, big picture economy and less of the petty politics and handout type that is generalized by so many observers, foreign and domestic.

With the listing, the Penang Port can move forward to upgrade it's infrastructure and help with expediting and importing products for Penang, a major manufacturing center without needing any money from the government. This is the way things should be.