Transport Minister Anthony Loke Siew Fook said the government will finalise operations agreement with Airports Holdings Bhd (MAHB) by end-2018. Photo by MOHAMAD SHAHRIL BADRI SAALI

LANGKAWI: Malaysia Airports Holdings Bhd (MAHB) expects to finalise a new operating agreement with the government by end 2018, group acting chief executive officer Raja Azmi Raja Nazuddin said.

Under the current operating agreement, the government is responsible for airport development throughout the country. MAHB, meanwhile, manages the airports and pays a user fee of about 11.8 per cent (RM300-400 million) to the government annually.

We are in very active discussion with MAHB to reduce user fee. However, nothing is finalised at this moment. We need to be fair in revising the rate,” Transport Minister Anthony Loke Siew Fook said after officiating the Airport Council International (ACI) Asia-Pacific (APAC) Small and Emerging Airports Seminar (SEAS) 2018, here, today.

He said Malaysia will not adopt Singapore’s approach of imposing an airport development levy to finance airport development.

Singapore’s new levy model — which also applies tax to travelling passengers from Changi Airport and connecting flights — is aimed at funding airport developments and related infrastructure for the airport operators.

Instead, Loke said, Malaysia intends to review the Regulated Asset Base (RAB) model, where charges will be based on the investments by investors.

Raja Azmi said the review of the RAB model should be finalised by mid 2019, resulting in a financing model that would support future airport expansion.

With the RAB model, MAHB can indicate capital expenditure requirement for private investors to embark on airport expansion for several critical airports, mainly Kuala Lumpur International Airport and Penang International Airport.

Loke said the government would offer certain amount of returns to the private sector if they invest in domestic airport expansion projects. Potential airport expansion projects include those in the East Coast, Sabah and Sarawak.

“We are very flexible in terms of our discussion and negotiation. We hope we can create a win-win situation,” he added.

Meanwhile, ACI Asia Pacific secretary treasurer and Oman Airports Management Company chief executive officer Sheikh Aimen Ahmed Al Hosni said small and emerging airports should be well connected to the main airports to spur tourism growth.

“We need to improve airports facilities, to bring tourism into the country and convince more airlines to operate at those airports,” he said.

Ends

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