KLIA2 Cost Overrun

For the past 3 years, the Ministers of Transport as well as the top management of Malaysia Airports Holdings Bhd (MAHB) have repeated lied to Malaysians about the opening dates for KLIA2.  The date has been moved at least 5 times from September 2011 to the current deadline of 2 May 2014.  Despite the due date being just 30 days away, there is still no certainty if KLIA2 can actually effectively operational, despite the bravado displayed by the Minister, Dato’ Seri Hishamuddin Hussein and his deputy, Datuk Abdul Aziz Kaprawi.

However, the biggest lie by both the Ministers and MAHB is the repeated claim that the cost of the “low-cost” airport would not exceed RM4 billion.

The initial budget for the airport when it was first announced by Dato’ Seri Ong Tee Keat, the then Transport Minister in July 2007 was only RM1.7 billion.  (Berita Harian 22 July 2007)

The budget was subsequently increased to RM2.0 billion in March 2009 (The Star 10 March 2009), and then RM2.5 billion in October 2010 (Business Times 30 October 2010).

MAHB then shocked Malaysians by disclosing that the cost of the new airport has ballooned to RM3.9 billion due to cost overruns in November 2011.

The CEO of AirAsia Group, Tan Sri Tony Fernandes had tweeted that the cost of KLIA2 has ballooned to RM5 billion in July 2012, a claim which was immediately denied by the authorities.

In October 2012, we were told in Parliament by the then Deputy Transport Minister, Dato’ Abdul Rahim Bakri that the cost was increased to RM4 billion. The current Transport Minister, Dato’ Seri Hishammuddin reiterated in August 2013 that the cost will not exceed the RM4 billion figure.

On 9 February this year, the Dato’ Abdul Aziz Kaprawi who was heading the Special Cabinet Taskforce on KLIA2 again confirmed that the cost of the airport will not cost more than RM4 billion despite the overwhelming skepticism expressed by the industry.

Hence it did not come as too much of a surprise when the Deputy Transport Minister himself finally admitted to The Edge Financial Daily that the cost of KLIA2 airport will cost more than RM4 billion.  He attributed the additional cost to a change in job scope and “other unforeseen matters”.  However, he did not confirm the exact quantum of increase in cost, but it is clearly expected to be significant.

Malaysians can no longer tolerate being repeatedly deceived by Ministers and the top management of Government-linked companies (GLCs), which are entrusted with our tax-payers’ money.  MAHB in particular has clearly demonstrated complete incompetence, and has attempted to hide such incompetence and mismanagement using outright lies and deception.

There can no longer be any excuse for the Prime Minister act firmly against the top management of MAHB, or even his Transport Ministers for failing to check on MAHB’s intransigence.  Most importantly, the contract for Tan Sri Bashir Ahmad Abdul Majid that has been extended twice since the cost of KLIA2 was confirmed to have ballooned to RM4 billion must be terminated immediately.  Heads must roll, or the entire Najib administration will be responsible for perhaps a revised-RM5 billion “low-cost” KLIA2 scandal and to send a message to all GLCs, that he will not tolerate incompetence and gross mismanagement.