PAC lambasts MAHB for ignoring AirAsia’s concerns

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KUALA LUMPUR: The Public Accounts Committee (PAC) yesterday slammed Malaysia Airports Holdings Bhd (MAHB) for ignoring the needs of stakeholders such as AirAsia Bhd when constructing klia2 in Sepang.

As a major stakeholder which contributes almost 80% of the traffic forecast for klia2, many of AirAsia’s concerns were not taken properly into account when the new airport was built, PAC chairman Datuk Nur Jaslan Mohamed told reporters at the Parliament lobby yesterday.

“People may be angry with me when I say this (but) AirAsia (is) driving the low-cost airline industry and the growth of klia2. It is not Malaysian Airline [System Bhd] (MAS),” he said.

“MAS is in intensive care unit now. From ICU, they may move to the coronary care unit, then normal ward but that will take years. It is companies like AirAsia and Malindo Air that are driving the growth of klia2,” he said.

He was commenting on the PAC’s report on the construction of klia2, which was tabled in Parliament earlier. The committee also found discrepancies in the construction of klia2 and called on the Auditor-General (AG) to audit the project — as well as MAHB — and identify the parties responsible.

There are 41 pages in the report, excluding the excerpts taken from the Hansards of five meetings held with parties involved in the project, such as AirAsia co-founder and group chief executive officer Tan Sri Tony Fernandes, former MAHB managing director Tan Sri Bashir Ahmad Abdul Majid, MAHB chief operating officer Datuk Abdul Hamid Mohd Ali, and the Transport Ministry’s secretary-general Datuk Seri Long See Wool.

The report looked at 10 areas and summarised how and why the cost of building the terminal had ballooned from RM1.7 billion in 2007 to about RM4 billion to date. Also, klia2, which was initially meant to be a low-cost carrier terminal (LCCT), has morphed into a hybrid terminal.

The report also stated that this was the first time that MAHB was given a contract to build its own terminal. However, rather than building a LCCT required by its stakeholders, it “obviously was not concerned” with the demands of their needs, the report noted.

It also noted that MAHB had made “unrealistic promises” to the government with regards to the expected opening of klia2. MAHB, said the PAC report, was “too optimistic” when it set September 2011 as deadline for the project to be completed. The terminal eventually opened on May 2 this year.

MAHB had also chosen to locate klia2 to the west of the Kuala Lumpur International Airport (KLIA), where experts had previously noted during the construction of KLIA that the area consisted of peat soil that needed additional work done to be construction-ready.

The choice ended up costing MAHB RM860 million on earthworks and reclamation alone. These works were initially estimated to cost only RM35 million.

Additionally, MAHB had to build an additional RM270 million runway and a separate RM55 million control tower.

PAC noted that MAHB decided to use vertical drains and surcharge reclamation for soil consolidation, but did not follow the ideal time period of three to five years. Consequently, deposition continued, which caused the delay in building the terminal, apron, runway and the taxiway.

It noted that depositions at the apron and taxiway have continued until today, resulting in water stagnation when it rains. To date, there are 10 sites where depositions have been identified.

MAHB, it said, had also ignored a recommendation to build a “finger-pier” design for klia2, but instead went with a satellite concept which required five storeys instead of just two, as initially planned.

Due to the increased height of the terminal, a passenger loading bridge costing RM104 million had to be installed at every gate. A skybridge was also required to connect the terminal with the satellite, contributing to another sharp rise in costs.

PAC also called for the AG to audit MAHB’s performance since it was first established.


This article first appeared in The Edge Financial Daily, on November 26, 2014.