Wednesday, February 08 2012
Rekindling a port’s glory days
Tuesday, 18 August 2009 16:20

By Himanshu Bhatt.

MANY people still remember the glory days of Penang’s waterfront when the city of George Town teemed with trading activities, foreign entrepreneurs and tourists, all brought in by a bustling duty-free port.

The city was, however, controversially stripped of its free-port status by the  federal government in 1969. Today, George Town’s docks and harbours present but a pale shadow of what the waterfront used to be, and a far cry from the potential it was once thought to have.


There is a historical irony in the port’s sudden decline since the removal of the free-port status. The very founding of Penang by the British back in 1786 was brought about by the visionary prospect of developing a thriving port. And the port did flourish for close to two centuries, drawing ships and traders from faraway coastlines of the Indian Ocean and the South China Sea.

A series of plans materialised this year that – while not exactly serving to revive the free-port status – may certainly help to rekindle the economic potential that was felt in the past.

The Transport Ministry has initiated plans to expand the port by deepening its channel as part of its agenda to spur the economy of the state. The project, it was announced, was critical to determine the lifeline of Penang Port, which is operating only as a feeder port despite its glorious past.

The ministry is assessing whether the channel deepening project, estimated to cost some RM350 million, could be financed through a privately funded initiative. A preliminary study has already been done, but detailed geotechnical and environmental assessments are pending.

What has happened is that over the last 40 years, the port’s growth has been largely stunted by hydrological and geological limitations in the Penang Channel. Port authorities and shipping operators have been beset with restrictions brought about by that the channel’s depth, which is  between 9m and 11m.

Such shallow waters have made it impossible for large vessels to use the port. And the ministry has been  compelled to act to increase the port’s competitiveness.

The channel is now targeted for deepening up to 15-17m. The exercise would help main mother vessels to enter the channel, allowing the port to have large-scale transshipment activities rather than being just a feeder port.

It should be noted that the decision to expand the port’s marine conditions has come in the face of increasing pressure to do something to revive the economic potential of the waterfront.

There has been pressure from various quarters to revive the free port status. But times and circumstances have changed since 1969. The Penang economy had moved on and adapted to the loss of the status.

Turning Penang into a free port now would not necessarily guarantee an improved economy. The state has since the 70s developed its free industrial zones and licensed manufacturing warehouses, making the idea of a free port obsolete for such sectors. The arrangements in these zones already allow tax exemptions for exported goods, as well as for imported raw materials and machines for manufacturing purposes.

And while waiting for the channel to be deepened, there have been other developments to watch out for.

A conceptual plan to set up a regular water taxi network, connecting ten coastal points on the island and mainland, was recently approved under the Northern Corridor Economic Region (NCER)

Once implemented, the system would effectively cut down travel time and link remote places in the state. It would also complement the existing cross-channel ferry service and the Penang Bridge which is jammed during accidents and peak periods.

The federal government has already set aside an initial allocation of RM50 million for the project under the 9th Malaysia Plan. The working model for the project would likely entail the federal government funding relevant infrastructure like construction of the jetties while private entrepreneurs would manage the operations of the system.

Without a doubt, the project would give tourism a massive boost by making it easier for people to have faster access to remote places.

In fact, the face of tourism in George Town is set to take a new turn due to another development at the port. A spanking new cruise and ferry terminal complex in George Town’s Swettenham Pier is targeted for opening early next year. The RM65 million project, which has undergone some delays, was originally scheduled to be completed by November 2007.

But the giant complex would still impress when unveiled. For it is built to take four medium-sized cruise liners and two passenger ferries at a single time. Its allure would also certainly complement the city’s grand heritage, which is now being trumped by the state after George Town’s listing as a World Heritage Site by Unesco.

Of course, one cannot expect to witness an overnight change in the fortunes of Penang’s port from these new projects. But the plans have served to inject some stimulus, some fresh hope, for the long awaited economic reawakening of the historic port city.

**Republished with permission. This article first appeared in the August 13, 2009 issue of theSun. Himanshu is newspaper's Penang bureau chief.  

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