MAHB privatisation: Where is the governance?

Why is the government so desperate to sell MAHB shares? I am retired with no pension and my lifeline is my savings in EPF.

Currently, EPF is struggling to pay higher dividends and made more difficult when the government demands EPF to invests domestically while foreign investment returns have been superior.

For transparency, the financial considerations to justify the privatisation especially the valuation should be open to scrutiny.

Khazanah and EPF will need to pump about RM5 billion to increase their share to 70 per cent. Wouldn’t it be more meaningful to do a rights issue and use the money – knowing the new operating agreement is beneficial to MAHB and the cost for expansion is much less than this?

If indeed the need to increase shareholding! Surely, EPF account holders and fund managers would like to know the answers to critical questions about the deal.

What are the assumptions used such as traffic growth, discount factor for NPV calculation and any revaluation done on landed properties held? The 2024Q1 results, profits showed a 4-fold increase mainly due to traffic growth.

Has future increase in profits been taken into account in arriving at the valuation? What are the key terms of the JV Agreement?

Chairman and CEO may be glamour positions but COO, strategy and project GMs are the real movers unless we still cling to "top-down" management-style.

GIP made a statement stating the company will play a role as technical partner. Are there preemptive rights or tag along provisions?

If there is a need to build new airports in key growth areas, will its management be given to MAHB? Subjective statements moving forward are cheap until we see some really strategic and quantitative plans.

Apart from the RM5 billion to increase to 70 per cent shareholding, the new investors need to guarantee outstanding debts of RM8 billion – not really a clean deal! MAHB’s management have performed quite well except for a few hiccups.

We never know these may not be their own doings? We have a tendency to look up at "gwai lo" and look down on local talents.

In 2021, MAHB awarded a contract to Pestech International Bhd for an automated people mover and associated works at KLIA and the contract was to run until 2034.

But was terminated in 2023, citing issues of nonperformance and delay risks.

A re-tender was carried out from companies pipped by Pestech in the original bid in 2021.

In a surprising turn of events, Pestech was reappointed as contractor of the aerotrain replacement project with Alstom and IJM Corp Bhd, which is acquiring a controlling block of 44.83 per cent equity interest in Pestech.

It is not rocket science to operate airports and the new investor do not have a sterling performance to show.

Last year Sydney airport’s loss was close to AUD600 million and the many complains received including at Gatwick and Edinburgh airports.

Sometimes, experts devote more effort to identification and definition of problems and less on evaluation and problem-solving as compared to novices especially when there are cultural differences.

The government now has a duty to change the mindset of Malaysians to practice critical thinking, be more pro-active and positive.

Do we need to spend RM5 billion to buy expertise and resorting to hiving off substantial shareholding to a foreign entity?

There is such a thing as "buying expertise." And expertise has an expiry date. Aren’t we sacrificing present minority shareholders in exchange for a big block to a giant company that will influence the operations of MAHB? And eliminating transparency that a public-listed companies are subjected to. And are we condoning monopolistic practices?

At parliament, PMX said Cabinet does not interfere in the investment matters of EPF, Khazanah or even Permodalan Nasional.

Speaking at the 47th American Malaysian Chamber of Commerce (AMCHAM) annual general meeting luncheon recently, PMX said, “We made it very clear that Malaysia must remain an open trading nation... and therefore, the collaboration between MAHB and the GIP to us is critical. We as a government will support (the collaboration)”.

Meantime, the Speaker has yet to decide on the matter after receiving two motions in parliament.

Wouldn’t this put unnecessary pressure on the Speaker to practice good governance?

Even some ruling party members want the government to scrap the deal.

Maybe it is time to make some minor cabinet reshuffle.

Noticed, I have not touched on national security and the genocide in Gaza.

Hamas has more urgent matters to think of, and solve. It’s purely economics, commercial and governance. And I believe the Boards of Khazanah and EPF are on the same page with me.

I think the public is not prioritising remote political considerations over business dealings the are supposed to be beneficial to the country and its interest.

What say you...

Saleh Mohammed is from Kuala Lumpur. The views expressed in this article are the author's own and do not necessarily reflect those of Sinar Daily.