Mavcom: Almost all airports in Malaysia to enjoy lower PSC

By NUR HAZIQAH A MALEK / Pic By TMR File

THE Malaysian Aviation Commission (Mavcom) is entering the final stages of its Regulated Asset Base (RAB) framework, which forms funding and developing basis for the nation’s airport network where the new passenger service charges (PSC) and other fees will be announced soon.

The commission wrote in a statement yesterday that the RAB framework will include the total planned development spending for the next regulatory period of 2020 to 2022 — PSC, landing fees and aircraft parking fees.

“The commission estimates more than 20 million passengers in Malaysia will enjoy a lower PSC following the introduction of the RAB framework.”

“Amongst the airports that are expected to charge lower PSC are Langkawi, Penang, Kota Kinabalu, Kuching, Miri, Sibu, Tawau, Lahad Datu, Kota Baru and Alor Star,” the statement said.

Its executive chairman Dr Nungsari Ahmad Radhi (picture) said the proposed RAB framework is in spirit of seeking views from various stakeholders in determining equitable rates that make economic sense.

The framework has been presented to policy makers with four different airport tiers for PSC, including the Prime Minister Tun Dr Mahathir Mohamad.

“The decision to set charges must be viewed in its entirety and not to benefit any entity and have multi-pronged benefits that will ensure investor confidence in the aviation sector in the longer term.

“What is crucial is that any decision pertaining to the implementation of the PSC and airport development must be undertaken in an orderly manner adhering to the rule of law without causing unnecessary and undue confusion as well as distress to the market,” he said.

The commission targets to work on implementing the new rates starting from Jan 1, 2020 and plans to make necessary announcements in due course.

Nungsari added, the proposed RAB framework can achieve a clear and transparent funding mechanism to ensure enough investments are made in Malaysia’s airports without any fiscal burden on the government.

“The commission estimates that the government would have to incur approximately RM300 million per annum in subsidies if the PSC is not properly set and under-investments in airports will continue.

“With the commission’s RAB framework, the government will instead be able to allocate its resources to other pressing needs in the country,” he said.

The finalised RAB framework is expected to ensure adequate funding is available to meet necessary maintenance and development, institute conditions for more disciplined capital expenditure spending in the airport sector reduce the PSC for almost all commercial airports in the country and various other goals.

Throughout the two-year period of study, it had also released a series of information and consultation papers for feedback in the framework formulation, which are uploaded on Mavcom’s website for stakeholders’ feedback.