GEORGE TOWN: The Penang state government has expressed an interest to acquire the Penang Port following recent media reports on proposals to the Ministry of Finance (MoF) by the private sector to acquire or privatise the port.

In a letter dated Thurdsay, Dec 2 to Prime Minister Datuk Seri Najib Razak, who is also the Finance Minister, chief minister Lim Guan Eng said the state government was keen to discuss the matter with the ministry.

Penang Port, which was corporatised in 1994, is currently wholly owned by Ministry of Finance Inc.

"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 your public pronouncements that key privatisation and project awards are conducted in a transparent and open international tender to maximise revenue, in which the Penang state wishes to participate.

"Penang Port is a key strategic asset to the economic growth of the northern region of Malaysia, which is a large contributor to GDP [gross domestic product] 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," Lim said in the letter which was made available to the media.

Lim said Penang Port could also capitalise on the proximity to the world's largest and second 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.

He said if the state is successful in purchasing Penang Port, it would 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 to entry price of the foreign technology provider," Lim added.

He said the state was also  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 the Prime Minister with representatives from the state government.

"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," Lim said.

He added that the state anticipates recurring economic returns via various economic investments, related to Penang Port and the returns will be channelled 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.

"Should you require fuller details, I would be delighted to make a full presentation 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," Lim said in the letter.

He said the state government's proposal was not only consonant with Najib's economic transformation programmes but also his vision to bind all Malaysians into one single economic entity and political polity.