KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is still in discussion with the government over the expansion of the main terminal at the Kuala Lumpur International Airport (KLIA).
Speaking in an interview with NSTP Business, MAHB managing director Datuk Badlisham Ghazali said the details have yet to be ironed out, especially on the exact capital expenditure (capex) and who would bear the cost.
“KLIA terminal expansion is something we look forward to discussing with the government. KLIA has the fastest growth and it requires expansion as it is now over its 30 million passengers per year capacity,” he said.
Currently all airport expansion programmes are funded by MAHB, except at the main KLIA terminal where the airport operator is currently discussing with the government.
“Our regulator, the Malaysian Aviation Commission (Mavcom), has come out with a mechanism called regulated asset base (RAB), which would eventually help MAHB to have more predictability on when, how and who to pay as well as the returns on the investment to be made on the expansion of the terminal,” he said.
Under the RAB framework, MAHB’s return on invested capital (ROIC) must not exceed its weighted average cost of capital (WACC).
With the main terminal KLIA expansion, MAHB expects to add capacity up to 65 per cent or 20 million passengers, thus enabling it to handle 50 million passengers over the next three years.
Badlisham said MAHB’s three-year expansion programme options include expanding the main terminal building’s contact pier’s left and right wings, which will be done in phases.
“This project is broken down in packages. The expansion of contact pier at KLIA main terminal will realistically start later part in 2019,” he added.
Badlisham stressed that the main terminal expansion urgency was not as much as the optimisation works for KLIA and all airports under its management.
The optimisation works allow MAHB to maximise operational efficiency and improve customers’ experiences.
Badlisham said MAHB’s would allocate up to RM600 million budget for the optimisation works at KLIA main terminal involving baggage handling system and the aerotrain upgrade works.
“The work has been on going including increasing baggage handling capacity and revamping the check-ins experience using more high technology equipment like self-bag drop, kiosk and face recognition and auto gates as well as the train upgrade system,” he said.
Badlisham said MAHB has committed its first phase of baggage handling upgrade work for outbound bags and it would take another two years to improve both the inbound and outbound baggage handling system.
On the aerotrain replacement, Badlisham said it would cost MAHB between RM250 million and RM300 million.
“Currently, MAHB undertakes the maintenance and overhaul of the aerotrains. We expect to replace the aerotrains beginning 2021,” he said.
Badlisham said MAHB will also be launching its airside connectivity facility between KLIA and KLIA 2, which will be in service by end of this year.
“It is a process involving vehicle like busses and system to transport passengers and baggage. It will probably take about nine months to a year to perfect it,” he said.
MAHB has started its upgrade on KLIA’s security features, allowing smoother passengers flow through security checks with better ancillary equipment.
“We are also committed to buy non-invasive scanning equipment. We will install it at the check-ins counters depending on the commercial viability,” Badlisham said.
He said the 20-year old KLIA did not have more space to accommodate various security equipment. Hence, MAHB will use both non-invasive and invasive scanning equipment at the security counters.