The Malaysian Insight

THE new operating agreement (OA), which determines the legal framework for Malaysia Airports Holdings Bhd (MAHB), could be signed before the finalisation of the regulated asset base (RAB) framework by the Malaysian Aviation Commission (Mavcom), said sources.

The OA between the Ministry of Transport and MAHB was supposed to be finalised in June but has yet to materialise.

“They’re (MAHB) comfortable that it can be year-end at the latest,” the source told The Malaysian Insight.

The new framework will allow MAHB to form strategic collaborations with the private sector for investments, thus reducing Putrajaya’s financial burden, as previous airport models required government allocations.

Meanwhile, according to an analyst, the RAB framework should only come into force after the OA is inked.

The delay is because both parties are fine-tuning the details of the agreement, especially in terms of the user fee paid by the airport operator to the government, the source said.

The user fee paid by MAHB, the country’s largest airport operator, was RM417.6 million in 2018 and RM391.8 million in 2017.

The Edge reported recently that the government is still finalising details of the four new OAs it entered with the airport operator in April.

The initial deadline to finalise the OA, which will set the legal framework for MAHB to run its 39 airports, was June.

The new OAs have not been signed yet. The government and MAHB are still negotiating the terms, the Ministry of Transport told The Edge.

MAHB said in response to The Malaysian Insight’s queries that the OA is still under deliberation.

“We are still deliberating on the OA and the terms have yet to be finalised,” it said.

The Malaysian Insight has also reached out to the ministry for comments.

Mavcom said recently it is in the final stages of completing the RAB framework which will form the basis of funding and developing the airport network in the country.

The RAB framework will also see different passenger service charge (PSC) rates at airports, depending on their services and infrastructure. This will come into force on January 1, 2020.

Additionally, Mavcom will announce new aeronautical charges comprising aircraft landing and parking fees, and the total planned development spending for the next regulatory period from 2020 to 2022.

It has presented the framework with four airport tiers for PSC to policymakers, including Prime Minister Dr Mahathir Mohamad.

Tier one will include KLIA and klia2 while tier 2 will include Penang, Kuching and Kota Kinabalu.

Tier 3 will entail Langkawi, Subang, Sibu, Tawau and Kota Baru while tier 4 will cover Ipoh, Malacca, Alor Star, Kuantan, Terengganu, Bintulu, Sandakan, Labuan, Limbang, Mulu and Lahad Datu.

The tier system is determined based on the facilities of the airports, including the aerobridge.  

Another source close to the development in Putrajaya said the new rates will be discussed in the forthcoming cabinet meetings.  

According to the analyst, the different PSC rates will have a neutral impact on passenger traffic.

MOT said on August 30 the PSC for travellers departing from all airports, except KLIA’s main hub, has been reduced to RM50 for international flights beyond Asean.

The fees for flights to Asean destinations and domestic travel remain at RM35 and RM11 respectively.

The Malaysian Insight previously reported that these rates are likely to be in force until Mavcom announces its new rates. – October 31, 2019.