MAHB Confident Of Maintaining KLIA2 Cost At RM4 Billion Despite Challenges.

Date: 20 February 2013

MAHB Confident Of Maintaining KLIA2 Cost At RM4 Billion Despite Challenges.

KUALA LUMPUR, Feb 20 (Bernama) - Malaysia Airport Holdings Bhd (MAHB) is confident of maintaining the development cost of the Kuala Lumpur International Airport 2 (KLIA2) at the budgeted RM4 billion despite cost challenges.

Chief Financial Officer Faizal Mansor said the challenges included increases in the price of raw materials due to the construction of the My Rapid Transit project.

"The cost has gone up and some of our contractors are suffering because of this. There could be some pressure (on cost) as a result, but we are monitoring the situation very closely," he told a media briefing after announcing MAHB's financial results here Wednesday.

Faizal said the RM4 billion cost was the cheapest for an airport to be built anywhere in the world because it includes a 400-meter runway, a new control tower and new set of air traffic control equipment. The cost also includes the infrastructure development surrounding the KLIA2 which will have a passenger capacity of 45 million, he added.

The issues related to the rising cost of materials has put the project 30 days behind schedule. "Currently, we should be almost 85 per cent complete, but are slightly behind schedule, at probably 81 to 82 per cent.

The KLIA2 is expected to commence operations on June 28 this year and will contribute positively to MAHB's revenue, largely fuelled by higher passenger movement complemented by enhancements in retail and commercial operations.

Looking ahead, the airport operator expects this year to be another challenging one. But business and consumer confidence is expected to pick-up on the prospects of an improving global economy.

MAHB expects passengers traffic to grow by 7.1 per cent this year on the assumption that Malaysia's economic growth remains within the five per cent range and the global economic environment remains stable.

Asked if the company plans to invest or operate an overseas airport, Faizal answered in the affirmative, with the Philippines, Europe and the Asean region, as a possibility.

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