26 November 2011
By B.K. SIDHU firstname.lastname@example.org
The billion dollar question as to whether the construction of klia2 has incurred significant cost overruns will be answered this Tuesday by Malaysia Airports Holdings Bhd, sources close to the matter told StarBizWeek.
MAHB issued a statement yesterday stating that it would conduct a media conference and preview of klia2.
“All will be revealed as to what has transpired,” said a source. The media will also be offered a “walkabout” at klia2 on Tuesday, according to the advisory note.
Some reports have suggested that the cost of building klia2 has escalated to RM4 billion and that would mean a huge cost overrun for the airport operator in constructing Asia’s biggest low cost air terminal.
Recently, when an MAHB official was asked to comment on the recent reports suggesting the RM4 billion cost overrun, he had said that “the only avenue for us to recoup the costs is from non-aeronautical revenue such as the retail segment.”
Fernandes has been the airport operator’s biggest critic in recent times. He had been unhappy about the raising of the passenger service charge by MAHB.
He had also questioned the need to have a third runway. (The third runway was not part of the initial plans but was added on later by MAHB at the request of airlines and to cater to both KLIA and klia2.)
Fernandes had also expressed his displeasure over the RM7 hike in PSC (passenger service charge) from RM25 to RM32 for the LCCT. (MAHB had not increased its PSC (passenger service charge) charges for the last nine years and Malaysia’s charges are one of the lowest in the region.)
Fernandes also had a “war of words” with Transport Minister Datuk Seri Kong Cho Ha over the PSC (passenger service charge) issue where AirAsia initially did not want to collect on behalf of MAHB. Since then, AirAsia has conceded, and has agreed to collect the PSC (passenger service charge) as part of their ticket pricing.
Hence industry observers say MAHB would do itself a favour by revealing the whole story about the cost it has been incurring in putting up klia2.
Sources said that a key aspect of Tuesday’s explanation by MAHB would involve the airport operator explaining how they had bumped up the size of klia2 from what was originally envisaged.
klia2 was initially conceptualised as a low cost terminal which would have an area of 150,000 sqm, but to accommodate regulatory requirements it will now be a much bigger airport with 255,000 sqm and that would mean the cost would also be higher.
“There was a need for a new design to be done and to also include the government’s security requirement for the full separation of arriving and departing international passengers and segregation of domestic and international passengers.
“If the terminal building is bigger, the apron also has to be bigger and the cost will surely rise from the original amount,” said the source.
The entire development will comprise a 3-storey main terminal building, a satellite building and domestic and international contact piers.
The superstructure’s initial cost was bandied at RM2 billion for 150,000 sqm but could have swelled to RM2.8 billion or over RM3 billion because the plans had been changed and the airport is much bigger than originally planned.
It is meant for over 30 million passengers.