KUALA LUMPUR – The privatisation of Malaysia Airports Holdings Bhd (MAHB) would significantly ease pressure on the government’s financial coffers, as the airport operator would not be fully dependent on the government to finance its operations and capital expenditures.
Universiti Kuala Lumpur Malaysian Institute of Aviation Technology economist (aviation and aerospace) associate prof Mohd Harridon Mohamed Suffian said the Abu Dhabi Investment Authority (ADIA) is a well-known financial funder that has invested heavily in projects worldwide.
“If MAHB actuates or undertakes special-purpose projects, the primary source of funds would be derived from ADIA.
“This is a strategic move as the controlling stake is within the prerogative of the government while at the same time reducing taxpayer’s contributions,” he noted.
On May 15, Gateway Development Alliance and its shareholders announced a pre-conditional voluntary offer to acquire all the shares in MAHB not already owned by the consortium at an offer price of RM11.00 per share.
The consortium is led by two Malaysian government-linked investment companies – Khazanah Nasional Bhd (via its wholly owned subsidiary UEM Group Bhd) and Employees Provident Fund.
Upon full completion of the offer, Khazanah will be increasing its ownership in MAHB from 33.2% to 40%, and EPF from 7.9% to 30%.
Collectively, Malaysian investors would own 70% of MAHB, while ADIA and the Global Infrastructure Partners (GIP), one of the world’s premier infrastructure investors and an experienced airport owner and manager, will hold the remaining 30%.
The Malaysian government will retain special share rights in MAHB and the chairman and chief executive officer will continue to be Malaysian citizens.
Mohd Harridon emphasised that ADIA’s rigorous attention to detail adds another layer of consideration, as the organisation meticulously establishes milestones and key performance indicators to guide project implementation.
“This ensures that any projects undertaken by MAHB would be scrutinised in terms of their efficiency and effectiveness and that progressions of projects are streamlined.
“It is also a norm for MAHB investors to seek the airport operator’s justification for operational expenditures to reduce wastage and plausibly to unearth the optimum methodology to operate the organisation,” he said.
This should be viewed positively, as it signals a proactive effort to optimise MAHB’s operational framework, thereby amplifying the return on investment.
However, he also highlighted the importance of determining whether the privatisation of MAHB is genuinely feasible for the government.
“Hence, the government must engage and utilise mathematical models to holistically assess the privatisation process,” said Mohd Harridon.
To date, MAHB manages 39 airports throughout Malaysia, including five international airports, 17 domestic airports and 17 STOLports (Short Take-Off and Landing) as well as the Istanbul Sabiha Gökçen International Airport in Turkiye.
At lunch break, shares of MAHB slid by two sen to RM10.08 with 4.18 million shares transacted. – May 21, 2024