Transport ministry urged to probe klia2 delay

KUALA LUMPUR: Tony Pua, DAP's national publicity secretary, has urged acting Transport Minister Datuk Seri Hishammuddin Hussein to set up an independent committee to probe into delays in the completion of the low-cost carrier terminal (LCCT), klia2.

At a press conference at Parliament House, Pua said the transport ministry has to be responsible for “the klia2 scandal" in view of the fact that its secretary-general Datuk Long See Wool sits on the board of directors of Malaysia Airports Holdings Bhd (MAHB).

"The ministry's reply does not make sense at all and shows its irresponsibility towards investments and expenses by government-linked companies," said Pua, who is also MP for Petaling Jaya Utara.

He was referring to Hishammuddin's written reply to his questions regarding cost overruns caused by the delay in the klia2 project, along with the amount of liquidated ascertained damages contractors could be slapped with.

In his written reply, the minister said MAHB would not suffer losses because there would be no impact on its business and profitability and that the delay would not affect MAHB's operations.

Hishammuddin added that the company would still be able to keep its AAA rating from RAM Ratings Services Sdn Bhd as it is financially well-positioned.

"If the construction cost increases due to the delay, how would this not affect MAHB's earnings ... I must stress that the minister has not given an assurance that the cost would not go beyond RM4 billion," said Pua.

According to Pua, the construction of klia2 has increased by as much as RM1.7 billion to an estimated RM4 billion.

He said MAHB had borrowed RM3.1 billion to support the construction cost.

"The delays in klia2 give a negative impact on the government's plans on making Kuala Lumpur a low-cost carrier hub in Asia."

Pua said even though the cost of klia2 had ballooned significantly, the cost would be shifted to users through an increase in airport tax.

He claimed the airport tax had risen by as much as 28% in November 2011 (to RM32 from RM25)  for the LCCT to support klia2's rising construction cost.

This article first appeared in The Edge Financial Daily, on July 04, 2013.

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