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Media statement by Tony Pua Kiam Wee in Kuala Lumpur on Thursday, 9th February 2012:

Seeking an appointment to meet Dato' Seri Kong Cho Ha next week for clarifications

The cost of the new "low cost terminal" KLIA2 had increased drastically from the originally estimated RM1.7 billion in 2007 to RM3.9 billion last year. The underlying reason was 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. This is increased the cost by at least RM1.2 billion.

In addition, the shift to KLIA West has resulted in the need for a 3rd runway costing RM270 million as well as a 2nd control tower costing an estimated RM300 million, which would not have been required had the new low-cost terminal be built in KLIA North.

However despite knowing full well that the KLIA West is unsuitable for airport construction and will incur substantially higher cost, MAHB has intentionally chosen not to disclose this crucial information to the relevant Government officials involved.

The Transport Minister, Dato" Seri Kong Cho Ha has only since responded a month ago that I was "deliberately politicising" the issue and that he doesn't "have much to answer because the decision was not made by Ministry of Transport".

I will now be writing formally to the Minister to seek an appointment to receive clarification from him over the issue. As the Minister-in-charge of airports in the country, and with the Ministry's Secretary-General Dato' Long See Wool sitting on the Board of Malaysia Airports Holdings Bhd, the Minister cannot disclaim responsibility over the fiasco which involved tax-payers' monies.

Tan Sri Bashir Ahmad, Managing Director of MAHB had on 29th November 2011 had the cheek to deny that public funds will be used to fund the drastic increase in cost of KLIA2, the new "low-cost" airport.

The cost of the airport first announced in July 2007 by the Transport Minister then Datuk Seri Ong Tee Keat was RM1.7 billion. The airport was also supposed to be completed by September 2011 but has since been delayed several times to the now April 2013 deadline.

Despite Tan Sri Bashir's denial that public funds will not be used, MAHB has announced to Bursa Malaysia on 30th January that 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% as a result of the exercise. In addition, MAHB has announced that "assuming that the net earnings of the MAHB Group for the financial year ended 31 December 2011 remains unchanged, the earnings per share (EPS) of the MAHB Group will be reduced proportionately with the increase in the number of MAHB shares".

The above proposed issuance of new shares to raise funds, is on top of RM3.1 billion in debt MAHB has raised in 2010, of which RM2.5 billion has already been drawn down for the purposes of financing the new KLIA2.

The Minister of Defence, Dato' Seri Zahid Hamidi had cordially invited Pakatan Rakyat Members of Parliament to seek clarification from him over the defence procurement controversies such as the RM9 billion Second Generation Patrol Vessels (SGPVs) and the RM7.55 billion Armoured Personnel Carriers (APCs). The Minister of Health, Dato' Seri Liow Tiong Lai, who is also Dato' Seri Kong's party colleague had also welcomed us to the Ministry of Health over Kedai Rakyat 1Malaysia (KR1M) health infringements.

Our request for a meeting will be faxed today to his office and I am certainly that Dato' Seri Kong Cho Ha will have nothing to hide and similarly welcome us to the Ministry to provide all the necessary clarifications of the drastic overspend by MAHB on KLIA2 to the tune of RM2.2 billion.

* Tony Pua Kiam Wee, DAP National Publicity Secretary & MP for Petaling Jaya Utara



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