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RM1 billion Penang International Airport expansion project received green light from Cabinet, MAHB to start soon.

Publish date: Tue, 27 Feb 2024, 01:45 PM

LANGKAWI: Malaysia Airports Holdings Bhd (MAHB) has gotten the approval from the Cabinet to expand Penang International Airport which is expected to begin by the second or third quarter this year. 

Transport Minister Anthony Loke said some of the expenses of the estimated over RM1 billion project would be borne by the national airport operator while the rest would likely be funded using the Airport Development Fund (ADF).

"Under our new Operating Agreement, we have a portion called ADF. If there is a need, we can utilise that as part of the funding model for Penang Airport," he said adding that MAHB's expenses would be recouped via an investment recovery model. 

Loke was speaking to the media after launching Routes Asia, hosted by MAHB and Tourism Malaysia, here today.

The ADF is part of the Operating Agreement between MAHB and the Malaysian government. 

It is a development trust account under Section 9 of the Financial Procedures Act 1957 [Act 61] to receive contributions from airport users, the public and also airlines, and does not involve contributions from government funds. 

Loke said MAHB will open the tender process, which is expected to be soon, while the expansion and upgrading project would take about three to five years to be completed. 

"The actual figures (of the project) would only be determined once the tender is completed… We're also looking forward to expanding the infrastructure near the airport."

"Once the approval is given by the Cabinet, which will be certified by this coming Cabinet meeting, then immediately they (MAHB) can start the project," he added. 

Last week, Prime Minister Datuk Seri Anwar Ibrahim called for Putrajaya to speed up the funding approval for the expansion of the Penang International Airport. 

In October 2023, Loke said that the government had approved RM93 million to fund land acquisition and infrastructure development for the airport expansion.

The Penang International Airport currently has a capacity of 6.5 million passengers and the expansion will increase its capacity to 12 million passengers yearly.

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