CEO Morning Brief

IJM Corp-led Consortium to Complete KLIA Aerotrain Replacement Project, Sources Say

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Publish date: Fri, 29 Dec 2023, 08:46 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Dec 29): Malaysia Airports Holdings Bhd (MAHB) is said to be mulling on hiring a IJM Corp Bhd-led consortium to carry on with the aerotrain replacement project that was halted in August, according to sources familiar with the matter.

Sources told The Edge that MAHB is currently ironing out the details before issuing the letter of intent to the consortium for the resumption of upgrading of the automated people mover (APM) system.

Besides IJM, the other two consortium members are said to be Pestech International Bhd and French rolling stock maker Alstom, both of which are the original contractors.

It is worth noting that IJM Corp is in the midst of taking up a 44.83% stake in Pestech by injecting fresh capital of RM124 million by subscription to new shares at 15 sen apiece via a restricted offer.

When contacted, MAHB said it is still in talks with parties involved, and hence cannot reveal details of the matter.

Although the latest development offers a glimmer of hope that upgrading work will be resumed sooner than later, it remains uncertain whether passengers will get the aerotrain ride next July as per the original timeline.

The three-year APM replacement project came with two deadlines originally, the first being July 2024 for the first of the two aerotrains to be operational, followed by the second one in March 2025 for full completion with both aerotrain services – spanning about 1.5 km — coming online.

The 25-year-old aerotrain was suspended in March this year, after a major breakdown that resulted in 114 passengers being stranded midway on the track.

This came midway of the replacement programme, which was awarded to Pestech in December 2021, with Alstom supplying the aerotrain.

In August, MAHB decided to terminate Pestech, citing “non-performance, compromising significant project milestones and risking delays to deliver the project within the required deadline” as the reasons.

“This project is of significant importance to ensure the comfort and convenience of our passengers travelling through the Kuala Lumpur International Airport (KLIA). Our focus moving forward is on the timely delivery of the aerotrain while observing stringent quality control and safety standards of the project, with no compromise on our operations and governance processes,” said then managing director and group chief executive officer Datuk Seri Iskandar Mizal Mahmood.

About two months later in October, MAHB announced that Iskandar Mizal’s tenure was not renewed and expired in the same month, with the board of directors naming group chief financial officer Mohamed Rastam Shahrom as the acting group CEO in the interim.

Read also:
IJM looking to join the race for MAHB’s aerotrain job
IJM Corp to acquire 45% stake in Pestech International for RM124 mil

MAHB terminates Pestech as KLIA aerotrain contractor, citing non-performance

Source: TheEdge - 29 Dec 2023

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