Airport expansion project approved in Malaysia

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Airport expansion project approved in Malaysia

Ministry of Finance in Malaysia has approved Malaysia Airports Holdings Bhd (Malaysia Airports) proposal to immediately proceed with the Penang International airport expansion plans in phases. There were certain issues hurdling the project commencement, but with the approval, Malaysia Airports is ready to start the project immediately.

Malaysia Airports, for the last two years, has been working on this expansion project and had brought in consultants to draw up the detailed construction plans after the necessary engagement with the Ministry of Transport (MOT), Malaysian Aviation Commission (MAVCOM) and the Penang State Government, including the Chief Minister himself. The plans are ready to be submitted by the end of July 2019 in order to obtain planning approval from Penang Island City Council (MBPP), after the project has received the necessary clearance on the plans from MAVCOM, MOT and Department of Director-General of Land and Mines (JKPTG) as the landowner.

Malaysia Airports is now in discussion with various parties on the options for investment and funding models. It is also to be noted that an application of Malaysia Airports to fully fund the project under the proposed MAVCOM Regulated Asset Base (RAB) framework has been submitted and is now waiting for approval. Malaysia Airports is indeed in a position to fully fund the project.

Once the necessary plans are approved, construction is expected to start in the first quarter of 2020.

Malaysia Airports has not disclosed the details of the project such as planned capacity increase yet. But the finance minister of Malaysia said earlier this year, that the expansion project could raise the airport’s capacity to 16 million passengers per year and attract more tourists and international airlines. 

Penang state government also welcomed the announcement of Malaysia Airports and stated that all the issues raised before, including equity and operation of the airport in case the would like to implement private finance initiative (PFI), have been resolved. 

Malaysia Airports manages and operates 39 airports in Malaysia and one international airport in Istanbul, Turkey. 

Penang International Airport is a mid-sized airport, but it is one of the busiest airports in Malaysia. It is the third-busiest airport in Malaysia in terms of passenger traffic and the second-busiest in terms of cargo tonnage. Currently is has the capacity to handle up to 6.5 million passengers per year, and its cargo centre can handle 360,000 tonnes of cargo a year. It has two runways about 3.35 km in total length.

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