Subang airport’s regeneration plan entirely up to MAHB, says Anthony Loke

Malaysia Airports Holdings Bhd (MAHB) will lead the regeneration plans of the iconic Sultan Abdul Aziz Shah Airport in Subang, Selangor.

This means that the airport operator will be given a free hand to decide who it will work with in rejuvenating the city airport, located some 20km from the heart of Kuala Lumpur.

“The whole Subang airport regeneration plan was drawn up by MAHB. They will lead the entire masterplan,” said Transport Minister Anthony Loke this morning.

“Which party it wants to work with, is entirely up to MAHB. If anyone wants to invest, including foreigners, they will need to talk to MAHB.”

Earlier, Loke said that any suggestions to carve out any airport was entirely up to MAHB. This was among the main terms stated in the new operating agreement (OA) between the ministry and MAHB that will run until 2069.

“That flexibility has been given to them,” said Loke.

“Lately, we have heard many suggestions to develop airports in Sabah, Sarawak, Kelantan, and Kedah. There are some private parties who have shown an interest in developing airports.

“The government welcomes investments by private entities, but the government has an OA with MAHB. If anyone wants to build anything in areas where there is already an airport, there must be an agreement with, or an approval from MAHB.”

Talks of carving out Subang airport emerged in 2021. WCT Holdings Bhd, controlled by businessman Tan Sri Desmond Lim, had submitted a “concept paper” to the Transport Ministry, revealing plans to take over the airport from MAHB.

This led to MAHB handing over its detailed plans, themed ‘Creating Tomorrow, Here: The Preferred Hub for Aerospace and Business Aviation in Asia Pacific’ to then prime minister Tan Sri Muhyiddin Yassin on June 11, 2021.

MAHB, in its 80-page Regeneration Plan, warned that plans to commercialise Sultan Abdul Aziz Shah Airport – including developing the surrounding real estate – could scare off foreign investors.

The airport operator added that it would mark a radical departure from the decisions and policies outlined in the country’s aerospace and business aviation blueprint, which could also potentially erode investor confidence.

Loke, in his press conference, revealed that the Cabinet, on Feb 2, had agreed in principle, to the new OA terms between his ministry and MAHB for the latter to operate, manage, maintain, and develop 39 airports and airfields in the country until 2069.

Among the other main terms and conditions of the new OA are:

  • The government and MAHB have the flexibility in the method of funding airport development costs, either using government allocations through the Development Expenditure, or MAHB through any suitable investment recovery model mechanism, subject to the mutual agreement of both parties with the weighted average cost of capital to be determined only when a project is to be implemented, and subject to government approval.
  • the establishment of the Airport Development Fund, a development trust account under Section 9 of the Financial Procedures Act 1957, to receive contributions from airport users, the public, and also airlines, and does not involve contributions from government funds.
  • 50 per cent of the Passenger Service Charge (PSC) component that is taken into account in the calculation of the User Fee, will be channelled to the ADF trust account. The percentage of PSC or percentage of other components in the User Fee to be contributed to the ADF account, will be reviewed every three years.