KUCHING: The Sarawak government’s plan to privatise its ports can be further optimised by establishing free port zones.
Universiti Teknologi MARA (UiTM) Sabah economist Firdausi Suffian explained that the state’s remarkable trade performance, which increased by 51 per cent year-on-year to RM166.15 billion in 2022 from RM109.89 billion in 2021, justified the plan.
“Privatising the ports would bring many advantages,” he said, adding that the state ranked third in Malaysia for the highest investment inflow, amounting to RM28.2 billion.
Therefore ports are essential for facilitating trade and commercial activities, making their management a matter of national interest.
However, he pointed out some considerations before privatising the ports. First, the government would lose control over the ports once privatised, and while private ownership could increase efficiency, it may also come with high costs that could deter investors.
According to Firdausi, government control has contributed to Sarawak’s third-ranking in the country and has supported small and medium-sized enterprises (SMEs) and infant companies in export and import activities.
Second, expanding the port and securing investments are crucial factors to consider. Private ownership may improve investment, but it would be dependent on the company’s balance sheet and expected profit.
Firdausi said, “Port infrastructure is like a ‘public good,’ similar to a public road. The expansion of the port requires a considerable amount of money, which usually requires government support.”
He added that substantial investment for infrastructure is something the government can absorb the costs and risks for, as demonstrated by ports such as Bintulu, Kuching, and smaller ports. Private entities, however, are often cautious with their return on investment (ROI) and may be hesitant to take on risks, especially for significant port expansions.
On April 23, Deputy Minister of Infrastructure and Port Development Datuk Majang Renggi said the state government was planning to consolidate and privatise five ports, namely Miri Port, Samalaju Port, Rajang Port, Tanjung Manis Port, and Kuching Port.
