Revenue lost as US navy cancels visits

KUALA LUMPUR - The Malaysian economy is losing millions because US Navy ships have stopped making port calls at the Port Klang Cruise Centre owned by Glenn Defence Marine Asia.

The United States suspended its contracts with the company on Sept 20 after its Malaysian owner, Leonard Glenn Francis, was arrested in the States for bilking the Pentagon of millions and bribing US Navy personnel.

US Navy Secretary Ray Mabus had announced the suspension, which can last until the investigation is over, but not longer than 18 months unless legal proceedings have begun, said an Associated Press report.

It is likely that US Navy ships will now use Singapore as their port of call. Aircraft carrier USS George Washington made a stopover there in late October.

The US Navy has the option to dock ships at Westport, North Port or Southport in Klang, but it prefers not to because there is a lot of commercial shipping in these areas.

The cruise centre, on the other hand, was relatively isolated.

The number of visits by US warships to Malaysian ports has jumped from "three annually in 2003 to well over 50" nowadays, according to business magazine Forbes on its website.

Last year, the US Navy ships that made stopovers at the cruise centre included two aircraft carriers and a couple of destroyers, and their crews had the opportunity to rest and relax in Kuala Lumpur and nearby cities.

An aircraft carrier has a crew of about 5,000. If each man or woman spends just US$100 (S$120), the local economy would get a US$500,000 (S$623,000) injection per visit.

Typically, a destroyer has a crew of about 280 while a cruiser has about 400 personnel.

Based on those numbers alone and a rough count of the US Navy ships that called on Malaysia last year, the sailors would have spent about RM3.9mil (S$1.5mil) here.

It could have been much more as the sailors usually spend on sightseeing tours, shopping, souvenirs, entertainment, food and hotel accommodation.

Also, fast-food chains and restaurants as well as other businesses operating in Malaysia would set up shop on the dockside whenever navy ships sailed into the cruise centre.

Francis, 49, better known as Fat Leonard, has been charged in San Diego, along with two US Navy commanders, in a widening bribery scandal involving prostitutes, Lady Gaga shows, luxury travel and multimillion-dollar government contracts.

Meanwhile, Cavina Lim reports from George Town that the Francis family were pioneers in the security business - supplying guards for ships at the Penang Port.

According to a risk management consultant, who requested anonymity, the company known as Glenn Security - which was somewhere in the Bishop Street area - was started by Francis' father in the early 1960s.

"The company existed long before the family's shipping and salvadoring business. And, definitely well before he (Francis) was jailed for firearms possession (in 1989)," he said.

The consultant said that in those days, foreign warships and other types of ships would call at the port to take on supplies of rice, oil and sugar.

"Penang was notorious for its many pirates who would slip into port and steal things at night from the ships docked there.

"Also, (steel) containers were not yet used in the early 1960s and goods were kept in crates that could easily fall off or break during loading or unloading," he said.