Sime Darby gives up on IJN

[azmana24]

from chedet.com

By
Dr. Mahathir Mohamad
on January 12, 2009

1. Now we know that the proposal to build a new airport at Labu is not a rumour. It is for real. Seems it is going to be a Private Financial Initiative - i.e. Government is not going to put up the money.

2. The site is 10 kilometers from KLIA. I had some experience of landing a small jet plane, so I can speak with a little knowledge. The approach speed of a big jet is between 300 to 400 kph. or it would cover the 10km in slightly less than 2 minutes.

3. The statement says that initially there would be no runway. That means the aircraft would land at KLIA.

4. Will the plane taxi 10km to Labu to disembark the passengers, pick up new passenger and then taxi 10km to the runway in KLIA to take off?

5. To do this it would need a special highway separated from other roads and highway. It would be interesting for the locals and tourists to see the huge planes taxiing 10km across the countryside.

6. Later a new runway would be built at Labu - must be at least 2km long - bringing it even nearer to KLIA. Wonder in which direction the plane will take off. What if a plane is landing or taking off from Sepang KLIA at the same time as as Labu. Only two minutes would separate the planes--not much time to take evasive action. I suppose planes taking off or landing simultaneously at KLIA and Labu must have great pilots and powerful engines to avoid accidents.

7. Remember that each airport would have its own control tower. Do they coordinate? I wonder.

8. May be it would be possible to bus the passengers from KLIA to Labu vis a vis if no runway is to be built in Labu. The Labu terminal would have to clear the incoming and outgoing passengers. So the KL passengers would to able to sightsee as the buses take them to Labu and then to KLIA. Coming back they would take the bus to Labu from KLIA and then to KL.

9. Since this is going to be a private financing initiative, the custom, immigration and other officers will all be paid by the operator of the new airport. No Government money involved. This would be the epitome of privatisation.

10. The land for the airport belongs to Sime Darby. So airport development and operation will be included in its portfolio.

11. Incidentally Sime Darby has also taken over the land at Telaga Harbour in Langkawi. LADA had to tell several potential developers to forget it. You do not mess around with Sime Darby. It is as good as Government.

12. Since I am the adviser to the Langkawi Development naturally my advice was not required.

13. Till today nothing has been done by Sime Darby to develop Telaga Harbour. There is a proposal to construct a floating platform for a museum in the harbor.

14. The turning basin for the mega yacht is already small. The floating platform would reduce the size of the harbor with the consequences that I need not mention.

15. I felt like shouting "Long Live Sime Darby!". It will become the biggest and most diversified of Malaysian corporations. We can all be very proud of it.

[aimankgsas]

Greed really knows no limit ... Favour a few & who cares about the rest!

[alvinyap]

bro, i just posted a long explaining above .. probably you missed reading it! 

Yes, I have... sudah baca ... but its good to have different viewpoints right? There should not be any  imposition on ideologies, beliefs etc ... doesn't matter for which side a person favors .. that would be his own choice  & this would be called democracy ... We shouldn't be upset when a person doesn't share similar point of views ... this goes for either side!

But I agree with one member's comments here (maybe in a different thread & sorry cant remember who) ... at least we are better off than our neighbours down south.  We've proven here that we can make changes through the ballot box 

Peace!!!! 

Here's a "flip-side" version of the story (although the article is already a week's old)....

January 09, 2009 17:56 PM     

Labu LCCT Can Pressure MAHB To Lower Costs

By Umi Hani Sharani

KUALA LUMPUR, Jan 9 (Bernama) -- KLIA East, the proposed new low cost carrier terminal (LCCT), at Labu, could pressure Malaysia Airports Holdings Bhd to lower the final cost of its proposed permanent LCCT site at KLIA, Aseambankers said today.

This in turn, would benefit AirAsia Bhd in the same way the budget airline was already benefiting from the low charges at the current temporary LCCT in Sepang.

"With the final development cost at a minimum, MAHB may accept lower usage charges from airlines and passengers. In this way, there is no threat to the RM10 billion investment already sunk into KLIA," it said in its research note here.

Asked how the cost of the LCCT site at KLIA could be lower, an analyst told Bernama that with the proposed Labu LCCT looming, MAHB could demand a better pricing from its suppliers to build its very own LCCT adjacent to the main terminal.

Aseambankers expressed concern that the proposed new airport could also split Kuala Lumpur as a destination into separate airports, especially when passenger movements currently only total 25 million per annum.

The new airport to be built in Labu is to be jointly developed by conglomerate Sime Darby Bhd and AirAsia.

The airline said that the LCCT at Sepang could only accomodate 15 million passengers once its expansion is completed this March.

This is because Air Asia claimed it stands to lose about a million passengers next year and almost four million passengers in 2011, without a bigger terminal.

Aseambankers said a compromise should be found between AirAsia and MAHB.

"A compromise should be found, instead of investing in a brand new airport location likely to undermine existing investments in KLIA, while providing insufficient real returns on investment over the near-to-medium term," it said.

Earlier this week, MAHB claimed it could provide a 30 million passenger capacity LCCT by 2011 with the potential to increase capacity to 45 million, while AirAsia claimed it could complete KLIA East by March 2011 with potential expansion for up to 50 million passengers.

Although AirAsia's passenger growth projections remain formidable, it would be more realistic to assume that total passenger traffic would grow at a compounded annual growth rate of about seven percent in the foreseeable future, with possible dips if the economy slows further.

However, there are some who are waiting for the government to give a clearer direction on which party would eventually build the permanent LCCT.

"I am quite in the dark on what the government has to say about this. We can't have two LCCTs," Jupiter Securities head of research, Pong Teng Siew said.

Either way, he said a new LCCT would keep charges low and this would help Kuala Lumpur in its ambition to be a regional hub.

Another analyst expresssed similar sentiment, especially on the relationship between AirAsia and Sime Darby.

"The relationship seems very tenuous, especially when they have yet to decide who will own it," he said.

"It must have taken some political will in deciding to have the new Labu LCCT, as it would eventually benefit Sime Darby's development there, he said.

"Why would Sime Darby commit the land and a huge amount of money to build the new airport when in times like these, the plantation land itself is already self generating," he said.

He also questioned the viability of Sime Darby's Vission Valley and the enticement it needs, such as a new airport nearby, to attract critical mass.

"Sime Darby has seen how Nilai has not taken off. If they want to go commercial, they might as well undertake the project on MAHB's proposed site," he said.'

When pointed out that MAHB's proposed land was considered inappropriate because it was swamp land, he said: "Well, what do you think KLIA was built on?"

"Even if you build it in Labu, you still need to go through the land strengthening process first," he added.

According to the analyst, the layout of KLIA East was also ambitious and could potentially rival KLIA's main terminal.

"It was the rakyat's money that was put into KLIA at Sepang. We were told then that Sepang was viable because they were looking at having four terminals to accomodate growth for the next 100 years."

"So now, we should move again for the convenience of someone else. Then again, this proposal could get AirAsia the lower charges it wants from MAHB," he asked.

-- BERNAMA

[azmana24]

More from chedet ....

By : Dr. Mahathir Mohamad
(January 17, 2009 3:48 PM )

1. Air Asia has done well to explain the justification for the so-called
KLIA-East in Labu.

2. Not having the facilities and personnel I can only give my very
unprofessional view on the justification:

a) Passenger Capacity

I must congratulate Air Asia on its very remarkable success. By 2014 it
will handle 26 million passengers. Present terminal at KLIA is handling
about 25 million passengers.

KLIA is planned to handle 125 million passengers. It has 25,000 acres of
land to build another terminal and four satellites. It can even
duplicate these terminals and satellites. But Air Asia wants low-cost
terminals with no aero-bridge, no luxury interiors. This is not a
problem for KLIA.

There is enough space in the 25,000 acres of reserved land to build the
low-cost terminal to accommodate the 60 million Air Asia passengers in
the distant future. MAHB (Malaysia Airports Holdings Berhad) can do
this. (Incidentally Putrajaya has only 10,000 acres of land). However,
by 2014 the total number of Air Asia passengers would only be 27
million. Accommodating this number should be no big deal for MAHB.

b) Runway capacity

By 2014 Air Asia will have 77 aircrafts. LCCT capacity will still be for
33 aircrafts. Does Air Asia expect all its aircrafts to be on the ground
in LCCT all the time?

Usually some would be in the air and many would be at other airports.
Expanding the parking area would not be too difficult. There would still
be enough land at KLIA.

As for the runways Times Online reports that Heathrow will now build its
third runway to be completed in 2020. Presently Heathrow has only two
runways and it still handles almost 70 million passengers.

As stated above, KLIA can build another three runways to handle 125
million passengers. If passengers and aircrafts increase to more than
presently handled by Heathrow, a third runway can quickly be built.

If KLIA LCCT is not connected by rail and bus, the thing to do is to
provide all these. Extension to the Express Rail Link line can be built.
Terrain is no problem. We have sliced through higher hills to build
roads.

If the waiting time for taxis has increased due to the huge airport
layout (I don't understand this), whatever solution for this problem is
proposed for Labu, the same solution can also be applied to KLIA LCCT.

c) Number of Gates

Since Air Asia will not be using the main terminal why should the small
number of gates there be of concern to Air Asia?

If Air Asia will be putting more than 55 Gates at Labu to cater for its
large number of aircrafts and movements, why cannot LCCT at KLIA be
expanded to have maybe 100 Gates to avoid any shortages? Will Labu be
provided with 100 Gates? If so, when? Again, why be bothered about KLIA
Terminal being equipped with aero-bridges etc when Air Asia does not
want to use it?

3. The comparison with Dubai and Jackson Atlanta International Airport
is misleading.

4. The picture shows four runways (no indication which airport).
Multiple runways is common but they are operated by one airport with one
control tower. The picture and the layout does not suggest separate
towers for different runways. You cannot have multiple runways close to
each other but controlled by different towers.

5. Perhaps Air Asia can show documents that separations between
different airport runways of 2km are permissible. Is there any example
of two major airports operating separately but located 2km from each
other? I don't know. Please enlighten me.

6. The problem prompting the idea of a new airport is the allegedly high
charges by MAHB for the use of LCCT by Air Asia. MAHB is owned by
Khazanah and it is believed Khazanah has a stake in Air Asia. Both are
therefore GLCs. The Government can tell them to negotiate fair charges.
Or is it the Government that wants this airport at Labu for reasons
other than need?

7. Or is it that Sime Darby now wants to go into airport business

[brabusgolf]

... but its good to have different viewpoints right? There should not be any  imposition on ideologies, beliefs etc ... doesn't matter for which side a person favors .. that would be his own choice  & this would be called democracy ... We shouldn't be upset when a person doesn't share similar point of views ... this goes for either side!

Well said & I can't argue with that ..... but except for a few, most people cannot swallow the IJN & the proposed Labu LCCT Terminal scandal, that's the people's general sentiment.

Btw, UMNO lost the KT's by-election to PAS and I think the IJN & Labu fiasco didn't help UMNO either.

[jebatswing]

Air Asia have an excellent business model. Profits they sapu, no need to pay tax, costs & liabilities pass on to the rakyat! Good huh!!!!!!!! 

[salleh]

Air Asia have an excellent business model. Profits they sapu, no need to pay tax, costs & liabilities pass on to the rakyat! Good huh!!!!!!!! 

Memang bijak kepala hotak depa ... ni macam punya niaga ana juga mau ... 

[mrfeelgood]

Sime Darby ni nampak macam special je.... x dapat IJN, dapat LCCT Terminal kat Labu.

Nampak macam Sime Darby ni mmg kena dapat something gak b4 march...

This is interesting....

Khazanah is crystal clear that they're not supportive of the Labu LCCT project but Straits Times Singapore seems to be all for it ..... Hmmm!!! pelik bin ajaib jugak ek!!!

------------------------------------------------------

KUALA LUMPUR, Jan 19 (Bernama) -- Khazanah Nasional Bhd, the government's investment holding arm, is not supportive of the plan to build a permanent low-cost carrier terminal (LCCT) in Labu, its managing director Tan Sri Azman Mokhtar said Monday.

He said the National Airport Masterplan should be used as a reference on what should be built for the sake of the country's development.

"Under the masterplan, 10,000 hectares have already been set aside, of which only about a third has been used," he told reporters after presenting Khazanah's annual review here. He was asked to state Khazanah's stand over the issue.

According to Azman, the airport sector is one where the clustering or network effect is important.
"We cannot have a few airports here and there because then you cannot get the connectivity," he said. Describing it as a national issue, Azman said: "Certainly we should follow through".

"We have the masterplan and we should go back to that. I am sure that AirAsia and Malaysia Airports can sit down and resolve (the matter) for the country's benefit," he said.
When building the airport, they should have software and hardware connectivity to enable seamless travel, Azman said.

"We are shareholders of Malaysia Airlines, we always maintain that both MAS and AirAsia can co-exist so that everybody can benefit," he said.

"In short, we do not support the Labu project. We should stick to the National Airport Masterplan as a lot of resources had been put in," he added.

-------------------------------------------------------

The Straits Times, Singapore. Jan 20, 2009.

Turbulence hits AirAsia's airport plan

By Leslie Lopez
South-east Asia Correspondent

KUALA LUMPUR: - The controversy over a plan by budget airline AirAsia to build its own airport is exposing a major problem that ails corporate Malaysia - how the dominance of state-controlled agencies often stifles entrepreneurship.

The wrangling also highlights the government's inability to rein in poor- performing public enterprises and pursue policies to maximise the use of resources, economists and bankers say.

Unless the government moves quickly to resolve the public feuding between state-controlled airport operator Malaysia Airports Bhd (MAB) and AirAsia, it could undermine the country's tourism sector.

'Especially in these times of crisis, the issue is how well does the country maximise its resources. Building a new airport to resolve this squabble isn't the solution,' said a CEO of a local stockbroking firm.

AirAsia, one of Malaysia's more successful private entities, says the current low-cost terminal located near the Kuala Lumpur International Airport (KLIA) in Sepang would not be able to cope with passenger and fleet growth by 2013.

AirAsia's aggressive chief executive Tony Fernandes predicts that the airline will handle 60 million passengers in four years' time and have a fleet of 184 aircraft.

He also says that MAB's plans to expand its facilities in KLIA will not be completed in time.

Since it would not have any say in the new facilities that MAB intends to build, AirAsia fears that landing and other charges could rise. It thus announced a plan to build its own airport to keep expenses low.

Prime Minister Abdullah Badawi's Cabinet had given AirAsia the green light for this new airport at Labu in Negeri Sembilan, roughly 8km away from KLIA. But that is just part of the story.

AirAsia had tried to negotiate a better deal with MAB, but why the latter did not try hard enough to keep its major customer happy remains a mystery. There are suggestions that the problem may be with MAB's main shareholder, government investment fund Khazanah Holdings. AirAsia's rapid growth has partly come at the expense of national carrier Malaysia Airlines, in which Khazanah holds a majority interest.

In recent weeks, Khazanah officials have lobbied senior Finance Ministry officials to get the government to review its decision on the Negeri Sembilan airport.

But this has received mixed reactions.

While proponents of Khazanah say that it is merely protecting its investments in MAB and Malaysia Airlines, others believe the investment agency is crowding out private enterprise. Khazanah dominates the national economy with controlling stakes in dozens of companies, such as transportation, medical services, finance, property and utilities.

Economists have long argued that this domination has led to inefficiency in policymaking, which is often skewed in favour of government-linked entities.

The turf war aside, there are strong arguments against a new airport. Detractors of the proposal say the KLIA was purpose- built to allow for another three satellite terminals. A new airport would also mean additional expenditure for transport infrastructure and duplication of resources.

What Datuk Seri Abdullah's administration ought to do is to play the role of referee effectively, analysts say.

If the government is of the view that a new airport would be a waste of resources, it should get MAB to negotiate with AirAsia, even if it means giving the latter wide autonomy to operate within KLIA. Under such an arrangement, the government would be able to protect its investment in the airport operator and at the same time allow AirAsia to grow profitably.

-------------------------------------------------------

    

[brabusgolf]

Labu plans shelved! ...  Power to the people