Airport in Kulim has no potential return-on-investment, says transport expert

SHAH ALAM - Spending on another international airport in the northen region is a waste of public fund, says transport expert Dr Rosli Khan.

He said there are sufficient aiports at the northen region with Penang International Airport as an international gateway to northen region, Sultan Abdul Halim Airport, Alor Setar's domestic airport and Langkawi International Airport.

"It is indeed a waste of public fund to spend on another international airport within a distance of less than 100 km radius.

"There is another international airport at Betong on Thailand side, where Kedahans use as their non-domestic flights," he said.

Rosli said airport in Kulim has no potential return of investment (ROI).

"I don't see any potential ROI for Kulim as passenger and cargo demands may not be there in the first place. No private sector company would invest in building a new international airport when the potential revenue is low and profit margin is negative.

"Development of Kedah airport is not worth it, where are the passengers going to come from? The population of Kedah is only about 2 million while Penang population is about 1.78 million.

"A combined population of less than four million cannot justify another new international airport," he reasoned.

Menteri Besar Kedah Datuk Seri Muhammad Sanusi Md Nor has urged Prime Minister Datuk Seri Anwar Ibrahim to consider approving the Kedah Aerotropolis project which will be fully funded by the private sector.

Commenting further, Rosli touched on generating income from airport operation namely aeronautical income and non-aeronautical income.

Aeronautical income is from landing, parking and aircraft services and derived from number of aircraft daily. Non-aeronautical income is from passenger airport tax, rental of airport premises, advertising and transportation services including vehicles parking charges, derived from the daily number of passengers and cargoes.

"The combination of both may not be sufficient to cover the cost of acquiring the land, on which the airport is built on and the cost of constructing the airport, terminal buildings and other facilities at Kulim Airport," he said.

In other words, Rosli said the economics will not work and the prime minister made a right decision not to go ahead with Kulim International Airport.

Meanwhile, Academy of Professors Malaysia (APM) Professor Dr K. Kuperan Viswanathan said development in Kedah airport can boost the state's economy.

"If it is to funded by the private sector, the government should approve it.

"Any development will bring economic activity and employment to the state. Kedah is a relatively poor state and any development that can boost the economy should be supported.

"The investments in the infrastructure around the airport and related businesses will help the state of Kedah’s economy," he said.

Commenting further, Professor of Economics in Universiti Malaya Datuk Raja Rasiah said it is not necessary to develop Kedah's airport since Kulim and Penang are neighbouring states.

"The upgrade to Penang's airport appears necessary as it has become overloaded.

"I have not seen the economic viability of developing a full fledged airport in Kulim, especially when it does not take long to reach Kulim from Penang," he said.