KUCHING: The Federal Government has agreed to extend an interim agreement to subsidise rural air services (RAS) in Sabah and Sarawak for one year, says Transport Minister Anthony Loke.
He said the Cabinet reached the decision this week amid ongoing negotiations between the Sarawak government and Malaysia Aviation Group (MAG) on the takeover of MASwings Sdn Bhd.
"The current RAS subsidy agreement will end on Dec 31 this year.
"But because the negotiations are still continuing, we will extend an interim agreement for another year," he told reporters after witnessing the Stage Bus Service Transformation agreement between the Federal Government and Biaramas Express Sdn Bhd here on Friday (Oct 11).
Loke said once Sarawak's takeover of MASwings was completed, Putrajaya would negotiate a longer RAS subsidy agreement.
He reiterated the government's stand to continue the RAS subsidy, which costs RM209mil a year.
On the takeover negotiations, Loke said operational details and a commercial agreement were still being finalised.
"We hope it can be concluded by the end of the year," he added.
