Fernandes mocks Malaysia Airports over KLIA2
November 23, 2011KUALA LUMPUR, Nov 23 — Main airports operator Malaysia Airports Holdings Berhad (MAHB) became a target of Tan Sri Tony Fernandes’ ire yesterday following reports that the new low cost carrier terminal near here may have blown its budget. The AirAsia CEO said MAHB was “laughable” and that the reported comments of one of their officials were “a joke”.
The Edge Financial Daily reported yesterday that the cost of the new low cost carrier terminal, dubbed KLIA2, is speculated to have increased significantly over its original estimate of RM2 to 2.5 billion.
The report also quoted MAHB officials as saying that additional cost would not immediately mean higher airport fees as these were regulated by the Transport Ministry and MAHB could recoup the costs from non-aeronautical revenues such as airport retail.
The official also said the airport charges are not based on the cost of building the airport and that the return on investment (ROI) for KLIA2 is based solely on non-aeronautical income.
Fernandes questioned the rationale behind MAHB’s comments and pointed out that MAHB recently raised its airport charges.
“They said that they won’t raise charges because of non-aeronautical revenue, then why have it raised it now,” the airline chief posted on the Twitter microblogging service. “It’s a joke and very sad.”
“They haven’t admitted the cost of the terminal (KLIA2) or delivery,” he added. “But to say that the cost of the terminal makes no difference to airlines and passengers is a joke.”
Tony Pua threatens to call for investigations by PAC and Auditor-General
.KUALA LUMPUR: DAP today asked Transport Minister Kong Cho Ha to give full disclosure on the construction of the new low cost carrier terminal (LCCT) in the wake of a news report about its cost ballooning.
The party’s publicity chief, Tony Pua, said he would demand investigations by the Public Accounts Committee and the Auditor-General if Kong failed to provide details on costs and work schedule.
The Edge Financial Daily reported yesterday that the cost of the new LCCT, dubbed KLIA2, might have increased significantly from the original estimate of RM2 billion to RM2.5 billion.
The project is spearheaded by the Transport Ministry.
Pua, speaking to reporters in the Parliament lobby, said Kong “must provide full clarification and justification as to why he has failed to manage and control the cost of the new airport.”
He also demanded an explanation for the delay of the project, as announced recently by Malaysia Airports Holdings Berhad (MAHB) managing director Bashir Ahmad.
He said the cost increase would mean higher airport fees, despite MAHB officials saying, according to The Edge, that this was not necessarily so.
One of the officials said the additional cost could be recouped from non-aeronautical revenues such as airport retail. According to him, airport charges are not based on the cost of building the airport and the return on investment for KLIA2 is based solely on non-aeronautical income.
But Pua dismissed the explanation and insisted that the “higher cost will be translated into higher airport taxes or charges”.
History of failures
He said the ballooning of KLIA2’s cost was another addition to the “list of MCA transport ministers’ incompetence”.
“MCA ministers of transport have a history of failing miserably in managing project costs, resulting in the rakyat having to bear the burden of billions of ringgit in cost overruns such as in the RM12.5 billion Port Klang Free Zone debacle.”
In early 2009, Sime Darby, in partnership with budget carrier AirAsia, proposed to privately fund the construction of a new LCCT in Labu at the cost of RM1.6 billion.
However, the government rejected the proposal, partly due to MAHB’s promise to build a new LCCT at KLIA for less than RM2 billion.
The project was due for completion in June next year, but has now been delayed to 2013.