Thursday, July 05, 2012

"Low-Cost" KLIA2 To Now Cost RM5 Billion?

I read with shock on Air Asia Chief Executive Officer Tony Fernandes’ blog that the cost of the new KLIA2 “low-cost” airport has ballooned to a shocking RM5 billion.

The initial budget for the airport when it was first announced by Dato’ Seri Ong Tee Keat, the then Transport Minister in July 2007 was only RM1.7 billion.  (Berita Harian 22 July 2007)

The budget was subsequently increased to RM2.0 billion in March 2009 (The Star 10 March 2009), and then RM2.5 billion in October 2010 (Business Times 30 October 2010).

At the end of last year, Malaysia Airports Holdings Berhad (MAHB) shocked Malaysians by disclosing that the cost of the new airport has ballooned to RM3.9 billion due to cost overruns in November 2011.  Hence the new estimated cost of KLIA2, RM5 billion is now nearly 200% above the original budget of RM1.7 billion.

I have repeatedly called for the cost of KLIA2 to be investigated by the Public Accounts Committee (PAC) as well as the Ministry of Transport since last year.  However, the attempts to secure accountability over the massive scandal has been impeded by the lack of urgency in the PAC as well as the absolute disinterest by the Minister of Transport, Dato’ Seri Kong Cho Ha.

Despite several promises to meet Pakatan Rakyat Members of Parliament over the issue since last year, Dato’ Seri Kong Cho Ha has failed to so.

I had requested for an explanation from his ministry over the issue, particularly over the reason for the shift of the airport from the originally proposed northern site (KLIA North) to the current western site (KLIA West) which is under construction. The shift of the site has caused the cost of construction to bloat because KLIA West was already identified as unsuitable for the construction of an airport due to it being a peat swamp.

The result of the shift for example, has caused substantial increase in earthworks cost, which the Ministry of Transport claimed to cost RM773 million, but is believed by many parties in the industry to be even higher.

However, despite the seriousness of the mismanagement of public funds, Dato’ Seri Kong Cho Ha has refused to provide any details in his parliamentary reply, and merely shrugged off the issue claiming that the decision to shift the site was “based on KLIA Blueprint December 2008”.

What is worse is the Minister’s complete lackadaisical attitude towards the brazen abuse of tax-payers’ funds.  The Transport Minister has responded to my statements earlier by saying that I was “playing politics” (Bernama) and was “barking up the wrong tree” (The Star).

Dato’ Seri Kong said I “should direct questions about the construction of KLIA2 to Malaysia Airport Holdings Berhad (MAHB) instead of accusing him of trying to cover up.”  He had further added that he has “nothing to hide. I'm not an airport engineer or consultant for the project and whatever the information I have about the project were given by MAHB.”

In fact, at the rate the cost of KLIA2 is piling up, it will soon become a much bigger scandal than the Port Klang Free Zone project which cost increased from an initial RM1.1 billion to RM12.5 billion.

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 that of the Minister of Transport.
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