Subang Airport Redevelopment Tussle A Doable Plan Or Flight Of Fancy
Experts have shot down the plan by WCT to carve out the city airport, saying it would bring no benefit to the government or to the people. (Bernama pic)GEORGE TOWN: A proposed redevelopment of Subang airport and its surrounding areas into a commercial hub has run into a barrage of criticism ever since a concept paper plan by a company was leaked into the public sphere early last month.
But what exactly is the company trying to do? And why?
WCT Holdings Bhd (WCT) was reported to have proposed to redevelop the airport and its adjacent areas at a cost of RM3.7 billion over the next 10 years. It has been seen as an attempt to carve out the lucrative city airport from the hands of Malaysia Airports Holdings Berhad (MAHB), a government company that owns and runs 39 airports in the country.
WCT insists that it is not planning to acquire the airport per se but merely wants to lease it from the government up to 2092. A reported plan by the company shows it envisioned a 130-acre commercial development with malls, offices and exhibition space next to the airport.
The company has since said the government will continue to own the airport and surrounding land but would make it available for them to be leased upon approval by the government. It also insisted that the proposal was at a concept paper stage.
The thing is: the company also operates the present Subang airport via its subsidiary Subang Skypark Sdn Bhd, which in turn leases the airport from MAHB under a 30-year concession until 2037, with an option to extend for another 29 years. Under WCT’s latest plans, the newer airport will welcome regional flights instead of just the domestic flights now.
Observers said that such a move – to redevelop and redesignate Subang as a regional airport – would lead to a catastrophe, severely impacting the viability of the KL International Airport (KLIA) in Sepang, as WCT’s plans would undercut KLIA’s premium passenger market.
Since the opening of KLIA in 1998, Subang airport has been designated for use by small aircraft and military planes. Key stakeholders have warned that if the proposal goes through, the losses could be up to RM11.9 billion, based on MAHB’s remaining concession of the airport until 2069, The Edge Markets reported.
However, MAHB has its own plans for the airport. It has also submitted plans to redevelop the airport and its surrounding areas, as part of a RM1.3 billion “regeneration” plan announced in April. The plan will see the disused Terminal 2 building torn down and other major redevelopment work take place.
The government-linked company will invest RM300 million – money it can well-afford – over the next five years. MAHB has a “strong cash and money market position of RM1.6 billion” with an extra RM914 million to spare for its Malaysian airports. MAHB also operates an airport in Istanbul.
It said the regeneration plans will see the doubling of aviation operators to over 100, creating and supporting a high-skilled workforce of 19,000 workers. On June 23, MAHB announced that it was also bringing Teknopark Istanbul as part of its regeneration plan in Subang.
Teknopark Istanbul is a technology development zone near the Istanbul airport which enables both local and international entrepreneurs to contribute to Turkey’s technology development capacity.
Most experts disagree with WCT’s plans, saying Subang airport’s expansions or future plans must be undertaken by the government and with the survivability of other national airports in mind.
Transportation consultant Goh Bok Yen said Subang airport’s role in serving the Klang Valley populace should remain, adding that it has served well as a domestic and medium-haul regional hub.
Another transport expert, Rosli Azad Khan, said the proposal by a private company to redevelop the airport was “strange”, as it did not come from the government itself, through the transport ministry. He urged the government not to entertain proposals from the private sector as airports were national assets and all redevelopment should be through open tender.
Ajit Johl, the Public Transport Users Association chief, felt the proposal would hurt MAHB, which relied on its most profitable airports such as Subang to cross-subsidise the running of its other 38 airports in the country.
Former deputy transport minister Aziz Kaprawi said it would do the government no good if Subang airport goes into the hands of the private sector as it would not be in the interest of the people, who have a direct stake through the Employees Provident Fund (EPF) and Khazanah Nasional Berhad, both shareholders of MAHB.
More recently, the Malaysia Airports Workers Union, along with the Sabah, Sarawak and Labuan wings of the MAHB workers’ union, threatened to carry out a nationwide strike if the proposed plans by WCT goes through.
MAHB chairman Zambry Abdul Kadir had also urged the government not to “liquidate” its ownership of the Subang airport to private entities, as it was the country’s strategic asset.
Umno deputy president Mohamad Hasan reminded the government over the sale of Senai airport to a private entity, which had then promised that it would one day rival Singapore’s Changi Airport. Today, 17 years later, it remains an empty promise. He said any sale or lease of the airport to a private company “owned by a few rich individuals” was against national interest.
WCT previously said the reported plan to carve out the airport was a proposed renewed concession and not a plan to acquire the airport as reported. It said it would operate the airport under a lease with the government continuing to own the land and the airport.
It added that the proposal was only at the concept paper stage, which Subang Skypark submitted to the government on March 1. - FMT
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