KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is being selective in spending its revised capital expenditure (capex) of RM300 million by prioritising critical facilities that require urgent upgrade.
Chairman Datuk Seri Dr Zambry Abdul Kadir said it was important for the airport operator to replace ageing assets in the Kuala Lumpur International Airport (KLIA).
"However, the current situation causes us some limitation in undertaking the physical asset replacement," he told the New Straits Times in his first interview with the media since being appointed three months ago.
MAHB reportedly in June said it had slashed its planned RM1.8 billion capex for 2020 by 82 per cent as the airport operator embarked on an aggressive cost-optimisation plan amid the Covid-19 pandemic.
Zambry said the prioritised focus included its ageing aerotrains and baggage handling system, runway upgrades, commercial reset for retailers, toilet refurbishment and Airports 4.0 digital initiative at selected local airports.
He, however, added that the revised capex might be subjected to a further review depending on MAHB's financial position.
"We may defer some upgrades but at the moment we need to re-prioritise," he said, adding that the upgrading work would take about two to three years and would be done in phases.
The 23-year old aerotrains, he said, were not able to accommodate KLIA's 32 million passenger traffic annually as the trains were designed for a maximum capacity of 25 million passengers.
"Hence, we need to supplement passengers with bussing. We need to rebuild new tracks for the new trains with enhanced technology. We have an assessment on which suitable system we can install.
"We will leave it to our technical team to do the best assessment. I believe there is a lot of advancement in train technology and hopefully, they can come out with the best for the future. We are doing the procurement process for the baggage conveyor and the aerotrains," he said.
Zambry said MAHB was studying several funding mechanisms for the physical infrastructure and the decision would be announced soon.
Meanwhile, he said MAHB had shut down certain sections of the terminal areas temporarily due to underutilisation.
"We try to save on the maintenance cost from the closure of the underutilised terminal areas. We have also consolidated the staff shift patterns due to this temporary shut down to manage costs better.
"We also look into collecting all the dues to us. For example, we have this passenger service charge (PSC) issue - due to the contraction of passengers movement, especially from international passengers," he said.
Zambry said MAHB was likely to pay a significantly lower user fee to the government due to the shortfall in revenue from both aeronautical and non-aeronautical segments, dragged by lower passenger traffic across its network of airports this year.
"We do not have sufficient revenue and the government understands our position. We have active engagement with the government particularly the Finance Ministry and Transport Ministry. They do understand our situation," he said.
MAHB had been paying between RM300 million and RM400 million in user fee to the government annually under normal circumstances before the pandemic.
MAHB recently issued the first tranche of RM700 million sukuk from its RM1.5 billion approved issuance.
The proceeds will be utilised to help keep the company's operations afloat.