Judicial Commissioner Eddie Yeo ruled that the compensation was conditional on Prasarana’s long-term commitment to operate the ferry service as a public service obligation, The Edge reported.

However, Prasarana’s decision to return the business after less than three years meant it was no longer entitled to the payout.

“The compensation was expressly tied to (Prasarana’s) continued assumption of the loss-making ferry operations, and consequently (Prasarana’s) abandonment of the business extinguished with it the right to compensation,” Yeo was quoted as saying in his Aug 22 judgment, the grounds of which were released yesterday.

Prasarana’s subsidiary Rapid Ferry had taken over the ferry service in May 2018 for RM1, but handed it back in December 2020 after incurring losses exceeding RM47 million.

Under a 2016 business purchase agreement, PPSB was to pay Prasarana RM30 million in three instalments over three years to cover potential operational losses.

Prasarana claimed that it was entitled to the sum since its losses exceeded the agreed amount, but PPSB argued that the payments were never unconditional but tied to Prasarana’s permanent commitment to bear the financial burden of the ferry operations.

Yeo said Prasarana’s subsequent signing of an asset, rental, sale and purchase agreement (ARSPA) in June 2021, which recorded its “abandonment” of the ferry service, extinguished all previous rights and obligations.

He also said the 30-year operating licence granted by the Penang Port Commission to Rapid Ferry reinforced the expectation of a “permanent commitment” from Prasarana.

Yeo then awarded RM50,000 in costs to PPSB.

PPSB was represented by lawyers David Morais, Shaikh Abdul Saleem, Pavithra Pillai, Sara Jailany, and Mah Dick Son, while John Matthew, Sivaram Prasad, Ong Wei Ying and Andre Tan appeared for Prasarana.