KUALA LUMPUR - THE Malaysian government has approved the construction of a RM1.6 billion (S$670 million) airport in Negeri Sembilan for low-cost carriers to spur economic growth amid a growing worldwide recession.
Transport Minister Ong Tee Keat was quoted by The New Straits Times yesterday as saying that the Cabinet has approved the privately financed project on a 2,800ha site in Labu.
AirAsia, Sime Darby to build new Malaysian budget airport
KUALA LUMPUR - MALAYSIA has approved plans by budget carrier Air Asia and conglomerate Sime Darby to build a new low cost terminal within reach of the capital, according to media reports.
The new terminal, to be called 'KLIA East @ Labu", will be built on a 2,800 hectare site in the central state of Negri Sembilan under a private finance initiative, costing 1.6 billion ringgit (S$673 million dollars), the New Straits Times said.
But questions are already being raised as to the rationale for building a separate facility further away from the main Kuala Lumpur International Airport (KLIA), instead of expanding the existing low-cost carrier terminal (LCCT).
Both the KLIA and LCCT are in Sepang which is on the Selangor- Negeri Sembilan border, and about 70km from Kuala Lumpur.
The LCCT is about 20km from the KLIA, and the new airport is believed to be 7km to 8km further.
It is unclear if the new terminal, to be called KLIA East@ Labu, will be an extension of the KLIA or a full-fledged airport.
Mr Ong said the project will be fully financed by government- linked conglomerate Sime Darby and partners that include budget airline Air Asia and Malaysia Airports Bhd.
However, industry insiders, quoted by the Malaysian Insider website, said the government will still have to spend on air traffic control, Customs, immigration and other facilities.
The project will anchor Sime Darby's massive integrated city development in Labu which will house five townships with services in education, health, sports, technology and entertainment.
Sime Darby, an oil palm plantation company, sparked controversy last week when its proposal to take over the National Heart Institute came to light. A public outcry forced the Cabinet to shelve the proposal made last Friday, despite Sime Darby's pledge to keep fees low for the lower-income group.
