The Penang state government opposes the federal government's plan to increase ferry fares to cover the losses of the company which runs the service.

In a letter sent to Transport Minister Liow Tiong Lai today, Penang Chief Minister Lim Guan Eng said the ferry management - Penang Port Sdn Bhd (PPSB) - should be improving services instead of increasing fares.

Liow had said Penang Port Commission (PPC) intends to increase fares due to the RM23 million losses in 2013 incurred by PPSB.

PPSB manager Mohd Sidik Shaik Osman had admitted that the company suffered losses around RM20 million annually for the past few years.

If the PPC's plan goes through, cars would be charged an additional RM1.30 for a total of RM9.

Motorcycles would have to pay an extra RM1.50 for a fee of RM3.50.

"The increase in fees for motorcycles is higher than for cars. This is not fair as it would burden the lower income group as many use motorcycles.

“PPSB is suffering losses due to poor management. It should be improving services before increasing fees," said Lim ( left ), who is Bagan MP.

Lim noted that the ferry is an important mode of transport linking the island to Seberang Perai.

Improving performance of the ferry services would automatically see an increase in ferry users, which would increase PPSB's income and profits, he added.

Lim said the Penang government has a good record of salvaging problematic organisations or near bankrupt ones like the Seberang Perai Municipal Council (MPSP).

When Pakatan took over the Penang government, MPSP had suffered more than RM230 million in losses for seven years.

"PPSB should not be taking the easy way out by increasing the fares especially when Mohd Sidik has said that even with the hike, it would still be losing RM17 million yearly," Lim said.

Lim added Penang was willing to take over the management of the ferry as long as it was done the proper way.

He proposed that a new entity - free from any liabilities or agreement in the previous contract - be formed under the Penang government which should be given the license to run the service. An additional 30 ferries or other forms of water transport would also be required.

"We are willing to absorb whatever losses after this. But we are confident we can manage without suffering losses or having to increase fares."

He noted that the ferry which has run since 1894 has been an iconic symbol for the island, known as the ‘Pearl of the Orient.’