Wednesday, 4 July 2012

Address KLIA2 cost bloat, Pua tells government

July 04, 2012
A model of the KLIA2 low-cost terminal. 
KUALA LUMPUR, July 4 — DAP’s Tony Pua today urged the government to probe the new KLIA2 low-cost airport’s construction cost, which he says may now “balloon” to RM5 billion from the initial budget of RM 1.7 billion.
 Pua was referring to AirAsia’s chief executive officer Tan Sri Tony Fernandes’ blog post today, where the latter had written: “Now there’s talk that the bill could go as high as RM5 billion”.

“[T]he new estimated cost of KLIA2, RM5 billion, is now nearly 200 per cent above the original budget of RM1.7 billion,” Pua said today

He added that Malaysia Airports Holdings Berhad (MAHB) had last year “shocked Malaysians by disclosing that the cost of the new airport has ballooned to RM3.9 billion due to cost overruns in November 2011.”

“In the interest of transparency and accountability, the prime minister must order a full public investigation into how the cost of the new ‘low cost’ airport could be so inflated and ensure that all who are responsible for the RM5 billion fiasco be sacked from their office, including ... the Minister of Transport,” said Pua.

The Petaling Jaya Utara MP had in March claimed the transport minister’s vague response to questions about the rising cost of the KLIA2 construction “shows that there is something to hide.”

“I asked Transport Minister Datuk Seri Kong Cho Ha about the reason for the shift of the airport... the minister only responded that the decision in the shift was ‘based on KLIA Blueprint December 2008’,” said Pua.

“The sheer nonchalance and lack of willingness to provide clarification shows that there is something to hide,” he added.

Pua had blamed the jump in KLIA2 construction cost on the significant earthworks required at the low-cost carrier terminal’s new site in KLIA West.

He had said the cost would probably go up further due to the construction of an additional control tower and the unsuitable terrain.

In February, Pua slammed MAHB managing director Tan Sri Bashir Ahmad for saying late last year that public funds would not be used to fund the cost increases at KLIA2.

Pua, who is also DAP publicity chief, pointed out that despite the earlier denial, MAHB said it will raise approximately RM598 million from a proposed share placement exercise.

“The action by MAHB to raise additional funds from the market proves that public financial interest has been compromised as a result of the RM2.2 billion increase in cost of KLIA2.

“Existing major shareholders of MAHB, which act indirectly as trustees to government and public funds, are forced to dilute their shareholding by 10 per cent as a result of the exercise,” he said, adding MAHB had also raised a debt of RM3.1 billion in 2010.

Kong, however, said in January that his ministry was not involved in the decision to shift sites as it was decided by MAHB alone.

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