Penang's ferries in murky waters

Penang's ferry service has been losing $6.6 million a year with the number of passengers - largely tourists and those bitten by nostalgia - plunging to a million, less than a tenth of what it used to be.
Penang's ferry service has been losing $6.6 million a year with the number of passengers - largely tourists and those bitten by nostalgia - plunging to a million, less than a tenth of what it used to be.PHOTO: THE STAR/ASIA NEWS NETWORK

Service not so useful any more but state and federal govts are divided over its future, management

From 1894, people relied on ferries that chugged across the Penang Strait as the most convenient way to make the crossing from the mainland.

But after 1985, despite travel time being cut to just 20 minutes, passenger numbers fell as millions zipped across in cars along two bridges in half the time and minus the hassle of waiting for a vessel.

Today, with a third link to the mainland being mooted, the ferry service appears outdated and unnecessary.

The service has been losing RM20 million (S$6.6 million) a year with the number of passengers - largely tourists and those bitten by nostalgia - plunging to a million, less than a tenth of what it used to be before the bridges were in operation.

Yet the ferry service is coveted by both the opposition Democratic Action Party-controlled state government in Georgetown and the federal administration in Kuala Lumpur.

Since it took control of the state in 2008, the DAP has outlined an ambitious plan to expand public transport over the waterways in an attempt to ease traffic congestion on the island, exacerbated by the building of the bridges to the mainland.

But the Barisan Nasional (BN) federal government has rebuffed these plans and instead moved to privatise part of Penang Port two years ago.

The ferry service was included in the privatisation deal with politically linked tycoon Syed Mokhtar Albukhary.

Kuala Lumpur's refusal to play ball with Penang is back in focus now that Tan Sri Syed Mokhtar, whose business empire is saddled with debt, wants to sell the ferry service - which charges as little as RM1.20 for a round trip - as part of an overall effort to make the port more attractive to investors.

But sources say BN would prefer to bear the annual losses for now.

Traffic congestion on Penang, which still has no rail system, remains one of the biggest grouses against the state administration, giving less reason for the BN ruling coalition in Kuala Lumpur to allow the DAP a chance to revitalise the slow-moving and neglected ferry service - with all except two of its eight vessels now more than 35 years old.

Shutting down the ferry service outright, however, does not appear to be an option either, given its heritage value to Penangites.

Penang Forum, a local activist group, which says no improvements have been made to the ferry service since the tragic 1988 collapse of the Butterworth terminal that killed 32 people, insists upgrading it is a cheaper and more efficient option than newer billion-ringgit road links being mooted by the state and federal governments.

Said Penang-born Andrew Yong, 37: "It should be expanded across the island so that Penang is more connected to the mainland train network.

"If not for the train, Butterworth has no reason for existing."

The federal government's urban transport arm, Prasarana, has been earmarked to buy the ferry service, according to sources in the industry, the government and Mr Syed Mokhtar's business empire.

This would allow the tycoon's otherwise profitable port business to more than double in value to RM400 million, a handsome boost from the purchase price of RM170 million just two years ago.

Industry players told The Straits Times that the government is willing to take back the ferry service as part of ongoing negotiations over the port's future.

Prasarana chief executive Azmi Abdul Aziz told The Straits Times that the idea of expanding operations to include ferries is still "at a proposal stage", adding that the company has not expressed explicit interest in the Penang ferry service yet, despite the Finance Ministry as early as 2009 directing the public transport unit to study such a takeover.

Coincidentally, that study was commissioned a month after the then federally controlled port cancelled plans to list on the local bourse because of the ferry service's losses.

A version of this article appeared in the print edition of The Straits Times on October 15, 2016, with the headline 'Penang's ferries in murky waters'. Print Edition | Subscribe