NEW YORK — Turkiye will extend its relationship with Malaysia Airport Holdings Bhd (MAHB), which manages Istanbul’s Sabiha Gokcen Airport (ISG), as it is satisfied with the performance of Malaysia’s premier airport operator.
This was agreed in principle yesterday at a bilateral meeting here between Prime Minister Datuk Seri Anwar Ibrahim and President of Turkiye Recep Tayyip Erdogan.
Anwar said the Turkish government is satisfied with the services of MAHB, which has operated the airport since 2008.
“Turkiye is happy with the performance of MAHB which is why it is extending its contract with the firm to manage Istanbul’s Sabiha Gokcen Airport (ISG),” Anwar told Malaysian media at a press conference at the Malaysian Mission here.
“It is satisfied with the achievement of MAHB and extended the contract as they feel MAHB has the capacity to continue managing the airport,” Anwar said, adding that with the extension of the runway, Turkiye needs a partner it is confident can manage the expanding airport.
“With a longer runway, it believes MAHB has the capacity to continue, although the usual process of procurement needs to take place (following the meeting between the two leaders).
“But it is a big endorsement for a Malaysian company to develop and manage the airport,” he said.
Sabiha Gokcen is operated by ISG, which is fully owned by MAHB. It has a 20-year contract to manage the airport until 2034 in an agreement worth US$2.01 billion. (RM9.2 billion).
The extension of the contract will potentially see an increase in revenue by at least RM500 million.
According to MAHB, ISG reached its rated capacity of 35 million passengers per annum (mmpa) in 2019, where several improvements and upgrades, including additional boarding gates, have been made to further increase the capacity to 41 mmpa.
“As of September 2023, daily pax movements stand at 114,000 compared to prior-Covid 19 of 106,000,” it said in briefing notes.
“This has placed a tremendous strain on ISG’s infrastructure and services. For context, Terminal 1 KLIA handles 35 mmpa, but the size is three times bigger than ISG’s current terminal.
“ISG’s service level for security and cleaning has dropped given its current status of operating at maximum capacity.
“Long queues at security screenings have occurred, especially during the recent summer season peak period. Rectification of this issue is underway by recruiting more security personnel and offering them competitive salaries.
“This will be resolved with progressive recruitment and security certification by the authorities by the end of October, achieving the required security personnel of 1,055 as instructed by Turkish regulators,” it said.
MAHB added that with higher pax numbers, cleanliness has also been affected. This will be resolved by the recruitment of an additional 130 cleaning personnel, to be completed by the end of September.
“With higher pax numbers, improvements to ISG’s baggage handling system (BHS) will also be needed to meet the airlines’ requirements.
“Upgrading to the BHS system is underway and contracted out to a significant BHS systems provider i.e. Vanderlande. Upgrades will also include the replacement of screening machines as required by Turkish regulators. Completion is targeted for December 2023.”
Other upgrades include the airport mosque, toilets, and terminal facilities, while the management team will be strengthened in tandem with the expansion and demand.
The second runway constructed by the Turkish government, is ready and expected to be commissioned by Erdogan at the end of this month. The second runway will expand the required terminal capacity to 80 mppa.
Under Turkish convention, expansion to the ISG terminal (expansion terminal will be a new non-contiguous terminal in between runway 1 and runway 2) will have to be undertaken by way of an open tender.
“MAHB is more than ready to invest and operate the expanded ISG terminal if given the opportunity,” it added. – September 21, 2023