PETALING JAYA: Final approval for the long-awaited Kedah Aerotropolis project will only be considered once technical, safety and financial concerns are resolved, says the Transport Ministry.
The Ministry said one major concern is the project’s possible disruption of existing air traffic management and operations at Air Force bases in the area, as raised by the air force itself.
There are also concerns over the project’s financial sustainability, with the Malaysian Aviation Commission (Mavcom) finding the project’s cargo projections unrealistic.
"Mavcom has also noted that current demand for full cargo services is already weak at Kulim International Airport.
"Cargo forecasts provided by the project developer, KXP Airportcity Holdings Sdn Bhd, have also been considered overly ambitious by Mavcom, given the current weak demand at KXP," the Ministry said in a parliamentary written reply dated Thursday (Aug 28).
The Ministry added that Mavcom found funding the project could also be an issue due to a lack of documentation from the developer proving it could secure the RM5.67bil needed for the project’s Phase 1.
"The commission also found a lack of any clear risk-mitigation strategies to attract investor financing in the developer’s application for the project," it added.
The Ministry said it has since contacted the project developer to submit proposed measures to resolve the concerns.
This must include a financial contingency plan, projected financial statements audited by an independent party, and clarifications with supporting documents regarding service commitments and cargo projections.
"The government will only further consider the application once KXP AirportCity Holdings Sdn Bhd has resolved the issues raised," the Ministry said.
The Ministry was responding to a question from Khairil Nizam Khirudin on the latest details on the compliance status for the Kedah Aerotropolis project.
