Many new factory-bus operators in the north may have to wind up business if the government does nothing to solve their problems, particularly after reducing fuel subsidies.

Seberang Perai Factory Bus Owners Association chairperson Tan Han Teik said those who lack the know-how to absorb the escalating operational costs will not survive in this sector where cut-throat competition is the norm.

penang factory bus petrol price hike protest 100608 04 “We expect many new of the new operators who have entered the sector over the last three years to go out of business unless something is done,” he said.

There is likely to be a knock-on effect on industrial growth in the region, especially in Penang, which could affect the federal government’s Northern Corridor Economic Region development project launched last August.

He was speaking to reporters today, during a protest against the latest increase in fuel prices.

chong eng Organised by Bukit Mertajam MP Chong Eng (left) and Padang Lalang state assemblyperson Tan Cheong Heng, it was held along the Buterworth-Kulim Expressway in Seberang Jaya.

The protesters held placards condemning the hike, chanted anti-government slogans and called on Prime Minister Abdullah Ahmad Badawi to implement remedial measures.

Cheong Heng said the government should have studied all the consequences of the price hike, instead of resorting to adhoc steps.

penang factory bus petrol price hike protest 100608 03 “Since factory-bus transport is very much of the country’s industrial development, the government will have to seriously look into ways and means to assist the operators,” he said.

Factory bus and van operators claimed that their costs have gone up by 60 percent over the last two years, and this will be aggravated by the 63.3 percent increase in diesel price that took effect on June 5.

Their operations must also take into account maintenance of vehicles and cost of spare parts, as well as disinterest among factory managements in increasing the quantum of contracts..

Higher expenditure

About 200 factory bus operators in Penang, including 20 major ones, provide some 1,500 buses to industrial zones in Prai, Mak Mandin, Bukit Minyak, Sungai Bakap, Juru, Bertam and Bayan Lepas. Half of these operators are newcomers.

factory in bayan lepas penang 060208 Unlike operators of public transportation, factory-bus operators are not entitled to any form of relief from the government..

“Operating factory buses and vans is no longer a viable and profitable venture. The older ones can survive but not the new ones,” said Josephine Chin Sau Hooi, 42.

An executive in Pengangkutan SC Chin Sdn Bhd, which has 19 buses and 30 sub-contractors to ply routes across the northern corridor, she said the company spends RM48,000 on diesel a month. This will likely go up to RM80,000 with the new diesel price.

penang factory bus petrol price hike protest 100608 01 M Muniandy, 53, who owns seven buses and three vans and operates in Sungai Petani, Kedah, said spending on diesel will go up to RM8,000 this month, or by RM3,000.

Perkhidmatan Bus Kilang Butterworth owner Tan Soon Long said he would have to pay RM4,000 more for diesel, for 14 buses and three vans. The new monthly bill will go up to RM20,000.

penang factory bus petrol price hike protest 100608 ani non Factory-van operator Ani Non ( right ), 45, said each trip would cost him RM35 compared to RM25 previously, and cut into his earnings.

Two years ago, the 100-member association submitted a five-point memorandum seeking subsidies. This was sent to Abdullah, then Penang Chief Minister Koh Tsu Koon and the domestic trade and consumer affairs ministry.

A dialogue session between the ministry and operators was held in April, 2006, but there was no outcome.