This article first appeared in The Edge Financial Daily, on January 7, 2016.

GEORGE TOWN: The Penang state government will meet with transport ministry officials tomorrow to discuss the fate of Penang’s iconic but loss-making ferry service linking the island with Butterworth, said Penang Chief Minister Lim Guan Eng.

The meeting, to be chaired by the ministry’s deputy secretary-general (policy) Datuk Ruhaizah Mohamed Rashid, will be attended by Penang state secretary Datuk Seri Farizan Darus, he added.

A number of attempts to revive the loss-making ferry service had been made as far back as 2006, when terminal operator Penang Port Sdn Bhd (PPSB) was reported as saying that it was in talks with the Penang government to revamp the ferry service. Discussions had included halving the number of large passenger-and-car ferries in its fleet and replacing them with faster, smaller passenger-only ferries.

In June 2009, the state government had also asked the  Penang Island Municipal Council to take over the ferry operations from PPSB, but nothing came of it.

More recently, Guan Eng said the Penang government on Dec 8 last year submitted a takeover proposal to PPSB with four conditions attached.

“I hope a favourable decision will be made from the meeting. I am willing to meet with Transport Minister Datuk Seri Liow Tiong Lai officially to discuss taking over the ferry service. We are willing to accept the challenge,” he told a news conference yesterday.

Under the proposal, the state will maintain the assets related to the ferry service and improve facilities, as well as keep all non-management staff currently employed. However, it will not assume the ferry operations’ accrued liabilities.

“We also want to take control of the berthing docks on Pangkalan Raja Tun Uda on the island and Pangkalan Sultan Abdul Halim in Butterworth,” Guan Eng said.

The state also requested for 30 water taxi licences from the ministry as part of the four conditions.

“We can definitely turn around the current RM20 million [annual] losses [the ferry service makes], but we need to increase the number of ferries. If we operate with just four ferries a day, it would [continue to] suffer losses,” said Guan Eng.

Meanwhile, a state government official said the state has yet to discuss ways to finance the takeover bid and run the service. “We will look at all options, including calling for proposals and tenders.”