7 May 2021
WCT is eyeing to take over the airport operation and the whole aerospace city project in Subang, says industry source
WCT Holdings Bhd has proposed to take over the Sultan Abdul Aziz Shah Airport, or commonly known as Subang Airport, and turn it into a city airport, industry sources said.
The company’s proposal to the government is expected to be deliberated in the upcoming Cabinet meeting.
According to sources, the construction and engineering company owned by businessman Tan Sri Desmond Lim Siew Choon sent the proposal to the Ministry of Transport (MoT) and the Ministry of Finance (MoF) recently.
Speaking under the condition of anonymity due to the sensitivity of the matter, one of the sources said WCT is not only ready to take over the airport operation in Subang, but also the whole aerospace city project which is currently being developed by Malaysia Airports Holdings Bhd (MAHB).
WCT already owns a 60% equity in Subang Skypark Sdn Bhd — the operator of the Skypark Terminal (formerly Terminal 3) of the Subang Airport. The stake was bought in 2018.
If the proposal is successful, Lim will expand his interest in Subang, an area which has become an aerospace hub.
“There are a few engagements that will be held between the shareholders, before it can be presented in the next Cabinet meeting,” the source told The Malaysian Reserve (TMR).
Yesterday, a news portal reported that WCT, in the proposal, suggested an estimated RM3.7 billion of initial investment, of which RM1.7 billion will be for the passenger and executive jet terminals set to open in 2027, while the remaining RM2 billion will be spent over the next 10 years on the airport city.
The MoF stated it does not comment on speculations, while MoT officials said it would “withhold comments to a later time” when contacted.
Meanwhile, MAHB said in a statement yesterday that the company has not been given the details of the proposal yet and neither has there been a discussion held with the government.
The airport operator said it is important to get views from regulators such as Civil Aviation Authority of Malaysia and Malaysian Aviation Commission before any decision can be made.
TMR also reached out to WCT for comments, but the public-listed company said it has to comply with the regulations set out by the Securities Commission Malaysia.
“Hence, we will not be able to provide any forward-looking statements,” WCT told TMR.
At present, MAHB is redeveloping a vast plot of land in Subang under its regeneration initiative spanning over the next five years.
The landbank spans a total of 250 acres (101.2ha), which the airport operator wants to build into an aerospace park and not merely a city airport.
In a media conference on April 19, MAHB’s subsidiary, KLIA Aeropolis Sdn Bhd, GM Randhill Singh said the company was given a “go ahead” from its shareholders to attract a total of RM1.3 billion in investments to regenerate Subang Airport within a next five years.
KLIA Aeropolis, which is in charge of airport development for MAHB, is eyeing to generate the funds from borrowings, via partnership from industry players, as well as from its internal fund.
The regeneration plan is expected to grow the aviation industry further, with the complete ecosystem set to be established and matured within the next decade.
Besides developing a complete supply chain from manufacturing parts to flight maintenance, the regeneration plan aims to expand Subang Airport’s capacity, mainly for the use of private jets.
The airport is now congested as it was designed for 1.5 million passengers per annum (mppa), but in 2019, traffic reached up to three mppa, double its capacity.
“The redevelopment is also expected to boost the property value around the area. There is so much potential that can be unlocked. That is why it becomes so interesting,” said another source.
Pulai MP Datuk Seri Salahuddin Ayub in response to the news said the government should not use the Emergency to pass the proposal.
“Do not allow direct negotiations. Reopen Parliament and let us debate this. This involves the people’s property,” Salahuddin said on his Twitter account.
In March, Lim acquired another 250,000 shares in WCT, raising his direct shareholding in the construction company to 103.35 million shares or 7.36%.
Lim’s deemed interest in the company stands at 18.15% held via Dominion Nexus Sdn Bhd, making Lim the largest shareholder who controls a cumulative 358.03 million shares or 25.51% stake in WCT, according to the company’s recent exchange filings.