MAHB expects over RM1b in 3rd-party investments

The airport operator is confident it will further catalyse investments from 3rd-party investors in facilities, systems and technology


MALAYSIA Airports Holdings Bhd (MAHB) expects to attract more than RM1 billion from investors in the next three to five years with about 50% of the money coming from foreign companies.

MAHB GM of land development Randhill Singh said the airport operator has committed about RM150 million for infrastructure developments to boost the air cargo and aerospace industry as part of its major plan from 2018 to 2020.

“We have started the investment in 2018, and we are confident it will further catalyse about RM1 billion in investments from third-party investors who will invest in facilities, systems and technology,” he said at a media briefing in Petaling Jaya yesterday.

Randhill said “more than 50%” of the investments would be from foreigners, and many of these companies are “more or less already on board” without revealing any names.

He said MAHB’s own investment will generate 3,200 jobs within five years, especially high-value technical expertise in the aerospace industry.

“In fact, we should see about 300 jobs coming in for Subang by the second half of next year,” he added.

Randhill said about RM40 million of the RM150 million of MAHB’s investment has been allocated for the Subang Aerotech Park with the total gross development cost of the project estimated between RM350 million and RM400 million.

“The development of the park will be undertaken through a strategic delivery partner, which we’ll be announcing sometime in January or February. We will bring in a partner who will have the right capabilities to develop this park for end-tenants, to provide the booths, suites and facilities,” Randhill said.

Further components of the airport operator’s investment include a maintenance, repair and operations plot for hangarage at the Kuala Lumpur International Airport, as well as the Digital Free Trade Zone (DFTZ).

“We’re already spending about RM80 million in capital expenditure (capex) and infrastructure at the DFTZ, and that will generate another RM250 million in facilities (investment). These are examples of where these figures are coming from, which will come to true fruition over the next three to five years,” Randhill said.

About one-third, or RM60 million of MAHB’s RM150 million investment, has already been spent on the DFTZ and the Subang Aerotech Park this year.

MAHB acting group CEO Raja Azmi Raja Nazuddin said the group hopes to finalise its operating agreement (OA), which it is currently negotiating with the government, by the first quarter of 2019 (1Q19).

“At the same time, we are also working towards the Regulated Asset Base (RAB) framework, where we will be looking at the projection of capex and operating expenditure (opex) over the RAB period, which is typically a three-year period,” he said.

He said the RAB framework provides an opportunity for MAHB to recoup the capex and opex undertaken for airport expansion, which is important as MAHB could be moving from being predominantly an operator towards being a developer.

“In many countries, the RAB has been implemented successfully, so the next body of work after the OA is the RAB framework, which you will receive more clarity on in 1Q19,” Raja Azmi said.

He declined to comment on the government’s proposal to set up an airport real estate investment trust as the details are scarce, while the group’s immediate focus is on the OA and the RAB framework.