Lim positive on privately-funded Kulim airport

(The Edge Markets) – Finance Minister Lim Guan Eng has welcomed the proposed development of the RM1.6 billion Kulim International Airport as it is privately funded and will help spur economic growth in the region.

The former Penang chief minister had no qualms about the northern corridor of Peninsular Malaysia having a third international airport (after the Penang and Langkawi airports), although he acknowledged the need for a feasibility study to be conducted for the proposal.

“There is no issue,” said Lim at a press conference at the Parliament lobby yesterday. “I think Penang has done its own feasibility study [for the Penang airport expansion]. We will have to wait for [the same from] Kedah.”

Penang Chief Minister Chow Kon Yeow has called for feasibility studies to be conducted to evaluate the necessity for the Kulim airport, highlighting the short 40-minute drive from the proposed site to the Penang airport.

Amid overcapacity, the Penang airport is currently slated to undergo an expansion to handle 16 million passengers annually from 6.5 million passengers presently, at a cost of about RM1.3 billion — funded via private funding initiatives (PFI).

On the private funding proposal for the Kulim project, Lim said it is in line with the previous announcement by the government to privatise infrastructure assets.

“In this aspect, the PFI effort is still ongoing,” said Lim, who revealed that it is a joint effort involving both the federal and Kedah governments.

Lim added that if a private party is confident of investing in the project it would be proof of rising investor confidence in the government and Kedah state.

“It is a good thing because it can spur economic growth and create more job opportunities,” he said. “I view it positively.”

Azmin: Kulim airport will complement Penang, Alor Setar airports

Speaking separately to reporters at the Parliament lobby, Economic Affairs Minister Datuk Seri Mohamed Azmin Ali confirmed that the Kulim airport will be entirely funded by the private sector.

“Yes, 100% (by private sector). The RM1.6 billion is the cost to build the airport, but it will be funded through private sector initiatives, because under the current economic conditions, we need active involvement from the private sector,” he said.

“We have to look at the long-term opportunity to develop our northern corridor. Penang has an international airport at Bayan Lepas now, but its capacity cannot cope with the increasing traffic. The expansion available for the airport is limited as well due to the lack of suitable land for further expansion,” he added.

Stressing the need to have another international airport in the northern corridor to attract investment for the industrial sector there, Mohamed Azmin said the Kulim airport will complement its Penang counterpart.

“I don’t think Kulim airport will have any impact (on Penang) as it is (developed) to complement the facilities we have now in Penang and also Alor Setar.

“We can see more investors are coming to Malaysia. But the policy of the current government is not to focus only in the Klang Valley or Selangor or Johor. We also want to bring more investors to the north and other states,” he added.