Monday, January 12, 2009

18 Labu-Labu

Why the rush to approve the Labu LCT? Wee Choo Keong, MP for Wangsa maju, has submitted 18 questions for Some Darby to answer. I have highlihted in bold the more pertinent ones.

1. Why the hurry to rush through the approval to build KLIA East @ Labu? Has it got anything to do with Abdullah Badawi’s term as the prime minister coming to an end in March 2009?

2. Is the construction of KLIA East @ Labu a purported attempt to shore up and safeguard the political future of a young and ambitious politician?

3. Why build KLIA East @ Labu when KLIA is still grossly under-utilised until today? (KLIA was originally designed to handle 125 million passengers a year but is now only handling about 25 million.)

4. Why build KLIA East @ Labu when the government has already built LCCT in Sepang and spent a total of almost RM244 million for the seeming exclusive use of AirAsia? (The sum includes the RM123.9 million used for its extension and upgrade as recently as 2008 last year.)

5. Why build KLIA East @ Labu when it will be a threat to public safety when its location is dangerously close to busy KLIA and LCCT in Sepang with a straight-line distance of only 10 km between them when ICAO (International Civil Aviation Organisation) strictly recommends that the minimum distance between two airports should be at least 40 km?

6. Why build KLIA East @ Labu when it will be at a much further distance away from the Klang valley where far more passengers will hail from?

7. Why build KLIA East @ Labu at such great cost for the exclusive use of one airline - AirAsia?

8. After the construction of KLIA East @ Labu is completed, will LCCT in Sepang be abandoned?

9. What is the synergy between the businesses of Sime Darby (a GLC) and AirAsia (a private company) that makes good sense for both companies to consider coming together to build KLIA East @ Labu and making a success of it?

10. Sime Darby does not own enough land in Negeri Sembilan for building KLIA East @ Labu which will require about 3,000 acres. So from whom will Sime Darby be buying land? Who are the owners of this land? Are they cronies, family members and/or people who are friendly and personally connected with Sime Darby and AirAsia?

11. If KLIA East @ Labu is apparently a joint-venture between Sime Darby and AirAsia, does AirAsia have the fund for this massive RM1.6 billion project when the company has suffered heavy losses for hedging aero fuel price and has to take delivery of 150 Airbus planes at an average of 1 plane per month?

12. Is it too far-fetched to consider that KLIA East @ Labu is perhaps built to help accommodate the parking need of AirAsia’s Airbus planes as they are delivered?

13. AirAsia sells air tickets in advance as far ahead as 1 to 2 years which is equivalent to deposit-taking. What will happen to this money which belongs to the public in the event AirAsia goes under because of its heavy commitment and undertaking in the construction of KLIA East @ Labu?

14. If AirAsia is purportedly doing well and has the fund to build KLIA East @ Labu, what are the reasons then behind all the foreign investors selling off their shares in AirAsia?

15. What is the reason for EPF to be the biggest investor of AirAsia, a JV partner in the construction of KLIA East @ Labu with Sime Darby, and why does EPF continue to buy shares in AirAsia when its share price continues to dip south?

16. Does Sime Darby and AirAsia have the fund to sustain the maintenance of KLIA East @ Labu when it will cost on average about RM40 million a year to maintain an airport?

17. Is the reason for EPF to be a major shareholder in AirAsia, which has entered into a JV with Sime Darby to build KLIA East @ Labu at great cost, so that when this massive project needs to be bailed out EPF will be there to do so with the rakyat’s money?

18. Even though the construction of KLIA East @ Labu is claimed to be a Privately Funded Investment venture, should the authority throw caution to the wind and compromise on public safety by giving its approval?

photos: JJ


Maverick said...

Good questions. For me the most puzzling is the financing, which bank in his right mind is going to loan huge soms of money to Air Asia, who is already so indebted, and whose shareholders equity (excluding deferred taxes and excluding its invstments in Indonesia and Thailand) is only 1 billion RM, roughly the same as what the minority shareholders have invested in Air Asia at the IPO? In other words, Air Asia has not yet made any profit at all over all those years, except through aggressive accounting issues. And that during good economic growth, while we are now facing the worst global recession of the last 50 years.

I like Idris Jala humble back to basics style hundred times better than Tony Fernandez hyphe.

see said...

If it is strictly privately funded & there will be no public money involved even in future bailout, I have no problem. But the sticking point is the safety issue, its close proximity of less than 10km to KLIA. Isnt that one reason they used to close Subang Airport?

ASM said...

Dear everyone,

Please note that AirAsia's chief has answered some of the questions brought up here in his interview with the Business Times today. This can be viewed online via NST's website.

Have a nice day!

Eric How, said...

Safety come first. Look at Bukit Antarabangsa. Cant simply approved the project & hope nothing happen!
It's not meet the safety standard. Just stop it.
Prevent it before too late.