Proposed Penang water taxis to be boon or bane?

 

Will there be enough demand to make the venture profitable? How many people are prepared to pay more and travel in comfort?

PLANS to launch a water-taxi service to transport passengers between Penang island and the mainland have resurfaced of late, almost nine years after the proposal was first made.

The earlier proposal by then Penang Malay Chamber of Commerce president Datuk Seri Abdul Rahman Maidin failed to take off after findings suggested that it was not commercially viable.

Now, the government, through the Penang Port Commission (PPC), is once again exploring the idea of introducing such a service.

This time, the plan looks set to get off the ground.

In July, PPC chairman Tan Cheng Liang was reported as saying that the port commission had received the federal government's approval for RM50 million for the state water transportation services.

The water-taxi service would be implemented by the Northern Corridor Implementation Agency during the Ninth Malaysia Plan period, which ends in December next year.

It also identified 10 proposed coastal points for the service: Butterworth, Bagan Ajam, Pulau Aman and Nibong Tebal on the mainland; and Weld Quay, Tanjung Bungah, Teluk Bahang, Tanjung Tokong, Pantai Jerejak and Batu Maung on the island.

But if this plan is much the same today as it was nine years ago, it begs the question: what has changed? What makes the project viable this time around? After all, passenger demand would be slow due to the global economic downturn.

According to an industry source familiar with the situation, when the proposal was first presented to the Economic Planning Unit by Abdul Rahman in 2000, the government was sceptical about the viability of the project and put it on hold. During that period, PPC's views were also sought.

It is learnt that a major concern was whether the company running the water-taxi service could sell the tickets at a price substantial enough to recoup costs and make a profit. As it is, Penang Port Sdn Bhd (PPSB) is still finding it hard to raise fares for its loss-making ferry service between Penang island and Butterworth.

"If the government wants to introduce a water-taxi service to Penang, it has to look into the fare structure. The ticket price has to be substantial enough for the operator to survive because it would not have the luxury to be cross-subsidised by other port activities like the existing ferry service," said the source.

And, will there be enough demand to make the venture profitable? How many people are prepared to pay more and travel in comfort, as relying solely on tourist traffic will not be enough to fill the water taxis?

Furthermore, what will happen to the existing ferry service, which, according to PPSB, can fill only 25 per cent of the available capacity? Will its commuters turn to the new water-taxi service to save time?

A source involved in the earlier proposal said there would be enough demand to support the water-taxi service only if the existing ferry service operated by PPSB were converted to carry vehicles only, leaving the water taxis to carry passengers.

Fares and demand aside, introducing the water-taxi service will also incur huge capital outlay, such as for the purchase of boats and to build the terminals for the water taxis to dock. PPC has yet to indicate the cost of operating the water-taxi service.

As such, an in-depth study has to be conducted before implementing the proposal to launch a water-taxi service.

There is no hurry to implement this project because, as the saying goes, "Better safe than sorry", right?

More importantly, we do not want the government to end up subsidising another loss-making venture like the existing ferry service or the controversial Port Klang Free Zone project in Selangor.