Govt, MAHB ink new 45-year deals to upgrade Malaysian airports
SEPANG: The Malaysian government via the Ministry of Transport (MoT), and Malaysia Airports Holdings Bhd (MAHB) yesterday signed new operating agreements (OAs) for 45 years until Feb 11, 2069, said Transport Minister Anthony Loke.
He said with the OAs, the airport operator will continue its role to operate, manage, maintain, and develop 39 airports and STOLports (short take-off and landing airports) nationwide.
“Today is a historical day because of this signing of the extension of OAs between the government and MAHB, and it will give MAHB enough time and room to make more strategic investments and decisions to upgrade our airports.
“Some of the salient points in the new OAs are that we give flexibility to MAHB to invest in terms of capacity building and upgrading of our airports based on the investment recovery model,” he told media after the signing ceremony here.
Loke shared that one of the biggest hurdles and challenges that MAHB face in terms of upgrading its airports is the lack of development allocation from the government.
He said every year, MAHB through MoT has to bid for allocation from the Ministry of Economy and Ministry of Finance (MoF), with not all bids getting the green light.
He also said that there are many smaller airports which need to be upgraded periodically.
“For instance, airports in Sabah and Sarawak have a lot of potential but are currently under-capacity. So we need to upgrade them as soon as possible so that we can tap into the tourism potential,” he said.
Besides the OAs, the government and MAHB also signed the Land Lease Agreement.
The signing of this agreement follows the Cabinet’s approval in principle on Feb 2, 2023.
Out of the 39 airports in Malaysia, five are international airports, 17 are domestic and the remaining 17 are STOLPorts.
“We will also set up an Airport Development Fund which is part of the OAs, whereby the mechanism will be worked out by the MoT together with the MoF that is applicable for new and upgrading of airports.
Meanwhile, in a statement, MAHB acting group chief executive officer Mohamed Rastam Shahrom said the OAs reaffirmed the confidence in the established airport network framework and cross-subsidy model that has effectively served the company over the years.
“Malaysia Airports remains committed to ensuring the highest standards of airport operations and services and continues to enable vital connectivity across Malaysia, spanning both urban hubs and rural communities.
“Furthermore, the new terms grant the group the flexibility to strategically invest in airport development and modernisation as needed, alleviating any financial burden on the government. This is facilitated by the capital return mechanism delineated within the agreements,” he added.
To date, the group’s contributions amounted to approximately RM42.9 billion, encompassing various aspects such as airport development costs, user fee payments to the government, dividend payments to shareholders as well as tax and zakat payments, among others.