New LCCT will be bigger, and with aerobridges

SEPANG: The new low-cost carrier terminal, expected to be operational by April 2013, will cost Malaysia Airports Holdings Bhd (MAHB) between RM3.6 billion and RM3.9 billion, and it will come with aerobridges.

The additional costs, according to Malaysia Airports Holdings Bhd managing director Tan Sri Bashir Ahmad, will help house close to double the size of the terminal it had originally provided for, triple the land area it had budgeted for, an air traffic control tower, a longer runway and a fully automated baggage system.

Public infrastructure, which includes a 15km road connecting the terminal to the Kuala Lumpur International Airport Highway, will cost around RM500 million.

Bashir said the delay in construction was due to a combination of a tedious tendering process, and various changes made to the original plans.

The latest change is the decision to put in a fully automated baggage system.

As part of the government's stimulus package announced in 2009, some 42 contractors were awarded jobs from the project.

MAHB had initially budgeted the new terminal, known as KLIA2, at RM2 billion and it was expected to be completed by September this year.

Bashir said the rise in scope of work for KLIA2 was due to additional regulatory, airline, airport and public requirements.

"The viability of the project is intact as proven by the Ratings Agency Malaysia (RAM)'s 'AAA' rating on our debt papers. This is after taking into account the expenditure on the new terminal," Bashir said.

According to MAHB chief financial officer Faizal Mansor, the airport operator is capable of taking on additional debts or equity to fund the project.

MAHB is yet to fully draw down its sukuk programme of RM3.1 billion and has a standing approval to place out 10 per cent of its shares to investors should it want to.

"However, there are no plans for it (private placement) this year as we have about RM500 million from the sukuk programme to draw down," Faizal said.

On MAHB's decision to provide aerobridges after all at the new terminal, Bashir cautioned that it was still the prerogative of the airlines to use them. The aerobridges will require an additional investment of RM100 million by MAHB.

Bashir also said the understanding was that KLIA2 would have the same passenger service charge as the current LCCT.

On AirAsia Bhd's co-founder and chief executive officer Tan Sri Tony Fernandes claims that the airline had been left in the dark on plans for KLIA2, Bashir said its officers held weekly meetings with AirAsia on the development of the new terminal.