PETALING JAYA: Final approval of the long-awaited Kedah Aerotropolis project will only be considered once technical, safety and financial concerns over the project are resolved, says the Transport Ministry.
The ministry said among the major concerns of the project is its possible disruption of existing air traffic management and operations at Royal Malaysian Air Force (RMAF) bases in the area, as raised by the RMAF.
The ministry is also concerned over the possible financial sustainability of the project, with the Malaysian Aviation Commission (Mavcom) finding the project’s cargo projections to be unrealistic.
“Mavcom has also noted that the current demand for full cargo services is already weak at Kulim International Airport (KXP).
“Cargo forecasts provided by the project developer, KXP Airportcity Holdings Sdn Bhd, have also been considered to be overly ambitious by Mavcom, given the current weak demand at KX,” the ministry said in a written parliamentary reply on Aug 28.
The ministry added that Mavcom had found that funding the project itself 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.
It said the proposal 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 Jerantut MP Khairil Nizam Khirudin about the latest details on the compliance status of the Kedah Aerotropolis Project.
