KUALA LUMPUR: MALAYSIA AIRPORTS HOLDINGS BHD (MAHB) is negotiating with the government to review the current operating agreement (OA) for better terms which will allow it to recoup any capital expenditure (capex) used for the development of airports under its management.
Acting group chief executive officer Raja Azmi Raja Nazuddin said the review would be made in conjunction with the Malaysian Aviation Commission's proposal to move towards a Regulated Asset Base (RAB) framework which would enable the company to be more effective in enhancing airport facilities nationwide.
He said under the current OA, the government was responsible to undertake all capital expenditure while the company acted as an operator and in return, it would receive revenue for running the airports.
“However, there is a mechanism in which airport tax is capped using a certain formula, that being the passenger service charge formula.
“The user fee paid (to the government) in return for the operating rights increases by 0.25% a year,” said Raja Azmi.
He said under the RAB framework, MAHB could potentially undertake some of the huge capex needed to upgrade or improve the airports under its management, and move towards the role of a developer instead of an operator.
Raja Azmi said under the current agreement, the company was unable to find the capex needed for improvements as the user fee paid out would increase every year while the PSC was capped.
“We want to move from price regulated PSC into price monitoring, which would allow us to spend the capex (needed) and have the mechanism to recoup the spending,” he said.
Raja Azmi said the current OA, which was entered into in 2009 and would expire in 2034, was better than the previous concession agreement but it still needed improvements.
He said the user fee currently paid by MAHB to the government amounted to over RM300mil a year.
“We also pay approximately RM100mil in dividends to Khazanah Nasional Bhd, Employees Provident Fund, Permodalan Nasional Bhd and other institutions, as well as RM60mil in taxes.
“We pay a good RM500-RM600 million each year but the way (we are operating is) so regulated, it is eating into our cash flow,” Raja Azmi said.
He said the company would love to have an environment where it had the flexibility to collect the income needed to refurbish the airports.
“KLIA should not be compared to Changi as the Singaporean airport operator's revenue goes back to a single airport while MAHB has 39 airports to manage.
“I don't have a recovery mechanism for it (refurbishment),” he said, adding that he hoped to finalise the OA in the next few months. - Bernama
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