21 June 2013

“The government is looking to what went wrong and we will investigate if need be,” one government official tracking the project told The Edge Review. He declined further comment.

Poor building design and soil conditions is the cause of repeated delays for Kuala Lumpur’s new RM4 billion budget airport, which has doubled in cost and is now only expected to be open in May 2014, according to The Edge Review.

The regional digital magazine’s June 21 edition reported that construction industry executives now estimate that the cost of the Kuala Lumpur International Airport 2 (klia2) project could exceed RM4.5 billion by the time it is completed next to KLIA, which opened for business in 1998.

It said Prime Minister Datuk Seri Najib Razak’s close aides and transport ministry officials acknowledge that the repeated delays and the cost overruns will heap additional pressure on the government.

It also represents a personal setback to Najib, who visited the construction site in January and declared that it would be opened before the end of this month.

“The government is looking to what went wrong and we will investigate if need be,” one government official tracking the project told The Edge Review. He declined further comment.

klia2 is the latest in a long list of policy fiascos that have plagued government infrastructure projects over the last three decades, the report said.

Opposition politicians, who are touting klia2 as the biggest policy debacle to hit Malaysia since Najib took over the premiership in April 2009, plan to turn the scandal into a central issue in its campaign against state corruption when Parliament sits for the first time next week under the government’s new five-year term. it added.

Najib has repeatedly pledged to deal with the poor management of infrastructure undertakings. But contract awards continue to be plagued by allegations of political favouritism and the corruption in public works projects is starting to show up in the delivery of shoddy construction work, and building and bridge collapses, the magazine said.

State-controlled Malaysian Airports Holdings Bhd (MAHB), the sole operator of the country’s airports and owner of klia2, has blamed the project’s delay on its contractors, and have slapped them for late delivery charges.

But the problems associated with klia2 also go beyond the political mudslinging that is set to dominate Parliament in coming weeks. Tourism is a major component of the Malaysian economy, which has received a major boost from the pioneering role Malaysia’s AirAsia has played in making no-frills air travel a major growth industry for the region, it added.

Global consultants Frost & Sullivan believe that passenger numbers for airports in Southeast Asia will hit 233 million in 2014, up from 211.3 million in 2011.

Countries in the region will also be spending a whopping US$295 billion to upgrade and build new airports between now and 2017. The new infrastructure is vital for the regional air travel business to keep growing, and airline operators say the delays at klia2 will only dull Malaysia’s tourism potential.

The development of Malaysia’s low-cost terminal is a story of how a series of government reversals and missteps turned into a very costly scandal, The Edge Review said.

The government spent RM9 billion to build the current international airport, which was designed to cater for future expansions, but the planners did not take into account the growth of budget air travel and its different terminal requirements.

“KLIA is designed for expansions, but low-cost terminals operate under different design conditions,” says one Malaysian building consultant. In Malaysia’s case, KLIA’s cross-shaped satellite terminal design was not built for the so-called linear blueprint required for low-cost air terminals.

To meet the growing demand for budget airline operators, Malaysia hastily built a low-cost terminal about 20 kilometres from KLIA. By 2008, that airport could no longer cater to AirAsia’s overwhelming growth. In response, AirAsia and conglomerate Sime Darby Bhd proposed to build a new terminal with private funds close to KLIA.

But that plan came under heavy opposition from airport operator MAHB, which wanted to build an airport on its own. After much haggling, the Malaysian government decided to scrap the AsiaAsia-Sime Darby airport plan, which at the time was estimated to cost roughly RM1.7 billion, in favour of MAHB’s plan.

Aviation industry executives and opposition politicians said that the troubles at klia2 stem from poor soil conditions where the new terminal is located and an airport design that is not practical for budget airlines.

They note that the peat soil conditions around the new airport required expensive earthworks, which accounted for more than half of the additional cost of the airport’s construction, the magazine reported.

What’s more, the ground had to settle for some 24 months, leading to additional cost overruns and construction delays.

Aviation experts say that low cost terminals are typically single storey buildings, and in its purest form consist of a single passenger processing area and a common holding room. Those areas are usually located adjacent to the aircraft parking zones that are connected by gates that lead the passengers to their planes.

“Low cost terminal are no frills, but klia2 is simply over the top and it is all because the owners are trying to fix the problems around the wrong design,” one chief executive of a construction company that was involved in the development of KLIA told the magazine.

The size of the terminal was increased to 257,000 square metres from the original design of 150,000 square metres. What’s more, the low-cost terminal will feature 68 gates and 80 aerobridges. There is also a 93-metre control tower, which aviation analysts say is a safety risk because it is located so close to the control tower of the nearby international airport.

All of these expensive frills are raising questions whether the airport will be commercially viable.

“The budget (airline) business is all about keeping cost low. Unless the government is prepared to subsidise the operations of klia2, budget carriers may have to consider other options,” one aviation industry analyst told The Edge Review.

Source: news.malaysia.msn.com

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