Transport Minister Datuk Seri Wee Ka Siong’s answer in Parliament to DAP Jelutong MP RSN Rayer yesterday, that the expansion and upgrading works of the Penang International Airport(PIA) was stopped pending the National Airport Strategic Plan (NASP) study, which is due for completion after 3 years in 2023, is disappointing and against the interests of Penangites. Waiting until after 2023 before a decision on expansion is made is no different from cancelling the project outright, and is a clear manifestation of vengeance politics to punish Penang for not being aligned to the Perikatan Nasional(PN) Federal government.
I had announced the expansion project in the 2020 budget in Parliament last year, after PIA exceeded its original capacity of 6.5 million passengers annually with 8.325 million in passengers last year, following the 6.9% increase in 2019 in passenger volume compared to 7.7 million passengers in 2018. The PIA expansion project is expected to cost RM800 million for its initial expansion of capacity from 6.5 million to 12 million passengers.
Why does PN have to wait until after 2023 to decide? Using the Covid-19 pandemic’s serious impact on Malaysia’s tourism industry and aviation sector as the excuse for waiting until 2023, is similar to the PN government expecting the COVID-19 pandemic to still be in our midst in 3 years time. PN must explain on what basis this wild assumption is made that the COVID-19 pandemic will not be over after 2023.
PIA is one of the few profitable airports outside Kuala Lumpur. Malaysian Airports Holdings Bhd(MAHB) had intended to fund the PIA expansion as a private financing initiative(PFI), since it will generate a positive rate of return. Whilst the NASP study for the 39 airports under MAHB may be necessary for loss-making airports, it does not make sense for projects not to proceed in relation to profitable airports like PIA.
Is Wee saying that there will be no infrastructure works for all airports until after 2023? Carrying out much needed infrastructure projects is a necessary spending to counter the current COVID-19 economic recession. Has the government forgotten that Malaysia economy recorded its worst GDP growth contraction in history of 17.1% in the second quarter this year?
The PIA expansion project had been scheduled to kick off in June this year and be completed by 2024. PIA is one of those critical infrastructure projects with 28% over-capacity in passenger volume, with 8.3 million passengers in 2019 using the airport meant for 6.5 million passengers. Further the PIA expansion project undertaken now, can take 4 years to complete, where the tourist situation is expected to be normalised by then.
By refusing to implement the expansion project is not only short-sighted but irresponsible, in sending a wrong signal to investors that the economic situation will not be normalised in 3 years time by 2023. This glaringly contradicts claims by the Finance Ministry that the economy will recover quickly by early 2021.
For sound economic and financial reasons, PN should continue with the PIA expansion project to quell suspicion that PN is victimising and punishing the PH Penang state government for political reasons.