Saturday, 4 December 2010

Letter by Penang Chief Minister Lim Guan Eng to Prime Minister YAB Datuk Seri Najib Tun Razak on Penang Port Sdn. Bhd. on Friday, 3rd December 2010:

Letter by Penang Chief Minister Lim Guan Eng to Prime Minister YAB Datuk Seri Najib Tun Razak on Penang Port Sdn. Bhd. on Friday, 3rd December 2010:

Letter to Prime Minister YAB Datuk Seri Najib Tun Razak on Penang Port Sdn. Bhd.

2 December 2010

YAB Datuk Seri Najib Tun Razak,
Perdana Menteri Malaysia
Jabatan Perdana Menteri
Pusat Pentadbiran Kerajaan Persekutuan
62502 Putrajaya

Dear YAB Prime Minister,

PENANG STATE GOVERNMENT INTEREST IN THE ACQUISITION OR PRIVATIZATION OF PENANG PORT

I am writing to YAB Prime Minister in your capacity as the Finance Minister to express the Penang state government's interest in Penang Port Sdn. Bhd. (Penang Port). From media reports, the Ministry of Finance has recently received proposals from the private sector to purchase and acquire Penang Port, which is currently wholly owned by the Ministry of Finance Inc.

2. On behalf of the Penang State Government and the rakyat of Penang, I would like to formally express the interest of Penang State to enter into discussions with the Ministry of Finance to purchase and acquire Penang Port. We are fully supportive of YAB's public pronouncements that key privatization and project awards are conducted in a transparent and open International Tender to maximize revenue, in which Penang State wishes participate.

3. Penang Port is a key strategic asset to the economic growth of the northern region of Malaysia, which is a large contributor to GDP and tax base for the country. A modern and vibrant port is critical to improving intermediate and final services such as logistics, and port services to serve as a hub for the Northern Corridor Economic Region, northern Sumatra and southern Thailand. It can also capitalise on the proximity to the world's largest and 2nd largest Muslim population, in Indonesia and China respectively, to create an integrated halal manufacturing hub, with straight-through processing from manufacturing, logistics to final delivery.

4. If the Penang State is successful in purchasing Penang Port, we will bring in both local and foreign technology partners including local Penang Malays, to operate the port and its facilities, to a world class standard. If required, we would offer equity to this foreign technology partner, at market prices. Ownership of equity creates an alignment of interest between all parties so that the port can be managed in a world class manner. We have identified several key world class and local partners but we would proceed on an Open Tender basis to promote transparency and to get the best deal possible. Consistent with the goodwill and spirit of co-operation with the Federal Government, the State Government will also offer equity to the Federal Government (at a suitable discount of course to entry price of the foreign technology provider).

5. Additionally, we are proposing the creation of an Advisory Board, consisting of various Malaysian and international eminent persons, with world class investment experience, capability and credentials in the area of port management, international trade and logistics. This Advisory Board will be chaired by YAB Prime Minister together with representatives from the state government.

6. Under its new ownership, Penang Port shall adopt world class, best practices consistent with the CAT philosophy (Competent, Accountable and Transparent) of the State, incorporating the Open Tender process for all project approvals and procurement in order to solicit the best value possible. Along side the Advisory Board, this will maintain the institutional checks and balances within Penang Port.

7. The State anticipates recurring economic returns via various economic investments, related to Penang Port. These returns shall be channeled back into strategic development and social projects related to healthcare, education, infrastructure and poverty eradication to boost the standard of living and raise the level of prosperity of the Penang rakyat.

8. Should you require fuller details, I would be delighted to make a full presentation to YAB Prime Minister at your convenience to fully outline the structure, strategy and mechanics of the State¡¯s plans for Penang Port. If allowed to participate in any sale of Penang Port, the Penang state government believes that you will be fully supportive of our economic initiatives to generate sustainable medium to long term returns, that can be channeled back into strategic development and social projects, for the betterment of the rakyat.

9. Further, this is not only consonant with your economic transformation programmes but also your vision to bind all Malaysians into one single economic entity and political polity.

Thank you.



"COMPETENCY, ACCOUNTABILITY AND TRANSPARENCY"



Yours faithfully,



Lim Guan Eng
Chief Minister of Penang