ALOR SETAR: Investors ready to fund Kedah's long-delayed Kulim International Airport (KXP) project are being held back by two outstanding Federal Government approvals, says Mentri Besar Datuk Seri Muhammad Sanusi Md Nor.
He said the state government fulfilled six of the eight conditions imposed by the National Physical Planning Council, with the remaining two requiring action by Putrajaya.
Kedah's Darul Aman Information Secretariat quoted Sanusi on Tuesday (Oct 27) as saying that the outstanding matters involved aerodrome approval from the Transport Ministry, Civil Aviation Authority of Malaysia and Royal Malaysian Air Force, as well as the National Aerospace Strategic Plan.
"We are still waiting for the aerodrome licence approval. The process appears rather slow and we hope it can be expedited," he told a press conference at the SG4 Business & Economic Forum 2026.
ALSO READ: Kedah Aerotropolis on hold pending safety and financial concerns resolved, says ministry
SG4 (State Government 4) is an economic cooperation grouping formed in 2023 comprising the four Perikatan Nasional-led states of Kedah, Perlis, Kelantan and Terengganu.
Sanusi said the state government had not been given a timeline for either approval.
He hoped that the outstanding matters could be resolved after the next parliamentary election.
He said Kedah intended to develop the airport and its supporting infrastructure through a private financing initiative, without relying on state or federal funding.
Under the proposed model, private investors would build the infrastructure and prepare industrial development sites, with the industries established there bearing the infrastructure costs.
He said investors who were ready to commit funds had to put their plans on hold pending the approvals.
The Transport Ministry had raised concerns over the project's technical feasibility, aviation safety and financial sustainability.
In a written parliamentary reply in August last year, the ministry said final approval for the proposed Kedah Aerotropolis would only be considered after these concerns were resolved.
It said the proposed airport could disrupt existing air traffic management and operations at nearby Royal Malaysian Air Force bases.
The Malaysian Aviation Commission (Mavcom) found that cargo demand projections submitted by the project developer were overly ambitious, given the weak demand for full air freight services.
ALSO READ: Transport Ministry going through feasibility study reports on Kulim airport
Mavcom raised concerns over the developer's ability to secure the RM5.67bil required for the project's first phase, citing insufficient supporting documentation.
It found that the developer lacked clear strategies to mitigate risks and attract investor financing.
The ministry said it requested a financial contingency plan, independently audited financial projections and supporting documents to substantiate the proposed cargo volumes and service commitments.
It maintained that the application would only be reconsidered once the issues were resolved.
The project was once touted as a major economic catalyst for Kedah, with Sanusi announcing ambitious projections in August 2021, when Perikatan was in power at the federal level.
At the time, he said KXP was expected to be completed by this year, creating about 18,000 jobs and helping raise Kedah's annual gross domestic product growth from 4.5% to 7.5%.
He projected that the airport would contribute RM1.2bil to the country's gross national income this year.
Sanusi envisioned KXP becoming a regional hub for air cargo, e-commerce, halal industries, pharmaceutical products and aircraft maintenance.
He said it would also serve as a departure centre for haj and umrah pilgrims from northern Malaysia.
The original plans included major road and rail infrastructure to connect the airport with industrial centres in Kedah.
