Selling of Subang Airports to WCT: Top Five Facts You Should Know
May 12, 2021
One Comment
Category - Business
Malaysia’s Government-Linked Companies (GLCs) exist in many industries in Malaysia. They have been a key role in driving Malaysia’s economy. However, despite being independently run by its own set of governance, GLCs have always been a subject of political intervention.
In the recent controversial proposal by WCT Holdings Berhad, Malaysia Airports Holdings Berhad (MAHB) was the latest victim of such practices.
Here is what we know.
A recent proposal by WCT Berhad, led by Tan Sri Desmond Lim, was submitted to the Ministry of Transport (MOT) which contains intent to acquire and operate Subang Airport until 2092.
Subang Airport is one of 39 airports currently managed by MAHB.
While GLCs are touted to be overcrowding the private investments in Malaysia, should we allow preferential carving-out of businesses and strategic assets such as airports to private companies?
Here are important facts that the public needs to know.
1.WCT Group has been awarded billions of projects is but hungry for more
WCT Berhad’s business growth is driven by private sector investment and, by a large boost of Government-led contracts.
At least that is what we know from public information.
WCT has an existing concession to built and operate gateway@klia2 in Sepang for 25 years. WCT’s contract is worth RM 575 million during Pak Lah and Najib’s era.
WCT also single-handedly won the rights to renovate the Sultan Ismail Petra Airport in Kelantan. The project is worth RM 440 million, awarded during Barisan Nasional era.
In addition, WCT was awarded RM 555 million to build TRX retail and commercial mixed development in Kuala Lumpur when Najib was the Prime Minister.
a. The Exchange TRX
b. Sultan Ismail Petra Airport
Is WCT the only “suitable” private entity in Malaysia to be awarded such ludicrous amount of projects with value worth billions of ringgit?
Or are they hungry for more due to other undisclosed reasons?
2. WCT Group has been closely linked to Najib in the 1MDB case
The largest shareholder of WCT is Tan Sri Desmond Lim, who owns 24% of the public listed company. He is also the owner of Pavilion, which is closely linked to Dato Seri Najib Razak and Datin Seri Rosmah Mansor.
During the 1MDB debacle, handbags and other luxury items deemed as gifts were seized and linked to Datin Rosmah Mansor. This took place at Pavilion Residences when police seized those items. It was reported that Desmond Lim was linked to Najib in various news articles.
A police truck being loaded with orange boxes, the signature colour of the French luxury brand Hermes, on May 18, 2018. ST
In addition, Lawrence Tee, who had worked for Tan Sri Desmond Lim since 1997, was the prosecution’s 20th witness in Datin Seri Rosmah’s graft trial. Lawrence was allegedly asked by Rosmah’s aide, Datuk Rizal Mansor to prepare a “consultancy agreement” for a billion-dollar solar hybrid project.
Does this place WCT as a pro-BN linked company? Or does WCT choose to only work closely with BN-friendly politicians including those in MCA?
In the myriad of political-linked private companies in Malaysia, WCT and many others are eyeing public-driven projects which are closely linked to political parties or for their leaders to stay afloat.
3. MAHB may lose out on billions in revenue and this will drive investors away
Most GLCs have large shareholders like EPF, Khazanah and institutional investors. WCT’s proposal to acquire and operate Subang Airport will cause MAHB to lose more than RM 11 billion in future revenue.
This catastrophic impact to revenue and earnings mean lower share prices and this will deter future investment by retail and institutional investors.
From a business perspective, MAHB will incur other incidental costs such as higher financing cost due to the downgrading of credit rating and access to funds.
It means, institutions like EPF and the public will earn lower dividends as Subang Airport too.
Ultimately, at the end of the value chain, the victims will include retail investors and the EPF members.
Does the public deserve to be victimized by yet another round of privatization such as those during Tun Mathathir and Tun Daim’s era?
4. The Workers Union and community have opposed the proposal by WCT
Unions comprising of MAHB Workers’ Union (KESMA), MAHB Sarawak Workers’ Union (KEPEMAB), and MAHB Sabah & Labuan Workers’ Union (KEPMAS) said the proposed takeover by WCT was performed in bad faith and only benefits a select few, mainly at the expense of MAHB and Subang Airport workers.
From the document sighted by FocusM, the proposal has triggered significant social media conversations and discussions.
Netizens expressed anger towards the MOT on the preferential carving-out of assets without consulting MAHB.
SHARAN RAJ: Central Committee Member Parti Sosialis Malaysia (PSM)
Parti Sosialis Malaysia (PSM) opposed the move too, arguing the plan will jeopardise MAHB and the local aviation sector negatively in the long-run as it will affect the management of 18 short take off & landing ports (STOLPORTS).
5. Over-development of Subang Airport will cause more problems to residents
WCT’s proposal to develop Subang Airport into a retail mixed commercial development will further fume public anger due to the over-congestion as the Subang Airport zone is a high density area.
Residents of Ara Damansara and those living in Sungai Buloh are already victims of the daily congestion that stretches up to 5 km during peak hours and heavy downpour.
Traffic congestion at Ara Damansara
The reality is Malaysia has too many retail / commercial buildings and shopping malls, with very little occupancy over the years.
Instead of developing Subang Airport into commercial mixed development, the Government should retain Subang as a hub for Maintenance Repair and Operations (MRO) for airlines as outlined in the blueprint.
Interestingly, MAHB has paid special attention in planning the long-term direction of the airport under the framework of the Subang Airport Regeneration Master Plan.
The framework was to expand the airport terminal that is now already congested and develop an aerospace city ecosystem spanning from component manufacturing to plane services.
Let’s retain Subang Airport for small commercial planes and private jet use rather than over-developing the area into yet another site for commercial building / malls.
Leave that job to Sime Darby, which has done a tremendous job in developing Ara Damansara into a retail-residence mixed township.
Letter to Editor.
By Khairul Imran
The views expressed are those of the writer and do not necessarily reflect those of KwikNews.
https://www.kwiknews.com.my/2021/05/12/selling-of-subang-airports-to-wct-top-five-facts/
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