The expense of building KLIA2

KLIA2 has been finally launched and there’s been plenty of buzz ever since. It faced a tonne of trials and setbacks, but on 2 May 2014, the doors of the airport finally opened to the public, offering its services of an aero-bridge, state-of-the-art facilities plus shopping areas.

It’s definitely a fancy airport with hotels and rail services to get in and out of the terminal. But all that fancy convenience tend to come with an equally fancy price tag. So how much did it cost to build KLIA2 (and can we really afford to have done it)?

The installation costs

There was clearly a lot of back and forth over cost even before KLIA2 was open, as their preliminary estimation of building KLIA2 was clearly overshot. In July 2007, it was announced that KLIA2 would cost RM1. 7 billion. Then it was increased to RM2 billion in 03 2009, and then RM2. 5 billion in October 2010. The final price, which has shocked many, turned out to be RM4 billion with more costs to be anticipated such as the RM100 million to build an Express Rail Link (ERL) in between KLIA and KLIA2. The final price being more than double the evaluation caused quite an uproar, with many demanding to know what had happened along the way.

Chairman from the Public Accounts Committee (PAC), Datuk Nur Jazlan Mohamed, explained the higher building cost was because of the changes in the aviation industry. He mentioned KLIA2 was initially designed for 25 mil travellers, but was now changed to support 45 million travellers after a forecast by the International Air Transport Association Industry (IATA) showed that there will be a demand for low-cost travel choices. This caused the size of the fatal to be expanded, meaning other parts like the aerobridge and baggage handling system also had to be enlarged.

This has caused popular low-cost flight AirAsia to be hesitant to join KLIA2 as they feared they would be unable to maintain their rates low with the brand new airport. AirAsia believes that they would have to raise their prices and that would affect the market that they have been focusing on all this time.

Cracks appearing

RM 4 billion was invested to build a state-of-the-art airport supposedly for budget airlines. When come up with that way; the plan can sound deceitful to some. But even if this was an essential project for the overall development of the particular country’s economy and infrastructure – shouldn’t RM4 billion be enough to cover some amount of workmanship guarantee?

It was in the news some days ago that KLIA 2 has been showing sinking aircraft parking bays and bumpy taxiways just a few several weeks after opening. In February, reports of cracks in the tarmac were patched up and although some news sites were quick to write off the cracks as ‘standard’ due to piping, it does give one cause for concern. We’ve spent vast amounts of ringgit – is this the standard amount for building something that cracks plus depresses within weeks?

Can it still be low-cost?

Malaysia Airports (MAHB) has given the assurance that as of now the charges at KLIA2 would remain the same as LCCT’s, even though this came with a qualifier in this the moratorium on cost raises would only be for a season. But beyond that, it would be to the government to decide whether or not there would be higher charges in terms of airport tax and so on for those who travel on low cost carriers.

But the high price of building and operating the new fatal has already forced AirAsia to include an additional RM3 fee passed on to consumers booking tickets with them. So , not just did the new airport cos Malaysia Airport Holdings Berhad (MAHB) a veritable king’s ransom – it’s going to cost budget travellers as well.

On their website, the particular airlines explained what the fee will be and why they are forced to charge it. In response to why the charge is charged, the website explains: “klia2 Fee is charged to offset the mandatory klia2 facilities charges enforced by the airport authority. ” RM3 is not a princely sum by any means but who’s to say where such additional fees will end? It is as clear as the Klang River at present if anymore charges is going to be added and how many other airlines may begin including such fees to offset the cost “imposed by the airport power. ”

Though many who have seen the new airport commend its snazzy exterior and facilities – it remains to be seen whether the RM4 billion was truly money well spent.

This was brought you by MICHELLE BROHIER from RinggitPlus. com. RinggitPlus analyzes credit cards, personal loans and home loans to assist Malaysians get more for their money.


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KLIA2 has been finally launched and there has been a lot of buzz ever since. It faced a tonne of trials plus setbacks, but on 2 May 2014, the doors of the airport lastly opened to the public, offering the services of an aero-bridge, state-of-the-art facilities and shopping areas.

It’s definitely a fancy airport terminal with hotels and rail services to get in and out of the terminal. But all that fancy convenience tend to include an equally fancy price tag. So how a lot did it cost to build KLIA2 (and can we really afford to have performed it)?

The mounting costs

There was a lot of back and forth over price even before KLIA2 was open, because their initial estimation of building KLIA2 has been clearly overshot. In July 3 years ago, it was announced that KLIA2 would price RM1. 7 billion. Then it has been increased to RM2 billion in March 2009, and then RM2. five billion in October 2010. The ultimate cost, which has shocked many, turned out to be RM4 billion with more costs to be expected such as the RM100 million to build an Express Rail Link (ERL) between KLIA and KLIA2. The ultimate cost being more than double the particular estimation caused quite an uproar, with many demanding to know what got happened along the way.

Chairman of the Public Accounts Committee (PAC), Datuk Nur Jazlan Mohamed, described that the higher building cost has been due to the changes in the aviation industry. He or she said KLIA2 was initially designed for twenty five million travellers, but was now converted to accommodate 45 million travellers following a forecast by the International Air Transport Association Industry (IATA) showed there will be a demand for low-cost take a trip options. This caused the size of the particular terminal to be expanded, meaning other areas such as the aerobridge and baggage handling system also had to be enlarged.

This has caused popular low-cost airline AirAsia to be hesitant to sign up for KLIA2 as they feared they would be unable to keep their rates low using the new airport. AirAsia believes they would have to raise their prices which would affect the market that they have already been targeting all this time.

Cracks appearing

RM 4 billion has been spent to build a state-of-the-art airport terminal supposedly for budget airlines. When put together that way; the plan can audio disingenuous to some. But even if it was a necessary project for the overall progress the country’s economy and infrastructure – shouldn’t RM4 billion be all you need to afford some amount of workmanship guarantee?

It was in the news some days ago that KLIA 2 was showing sinking aircraft car parking bays and bumpy taxiways just a couple weeks after opening. In Feb, reports of cracks in the the road were patched up and even though some news sites were quick to dismiss the cracks as ‘standard’ due to piping, it does give one particular cause for concern. We’ve invested billions of ringgit – is this the standard amount for building something that cracks and depresses within weeks?

Can it still be low-cost?

Malaysia International airports (MAHB) has given the guarantee that as of now the charges on KLIA2 would remain the same as LCCT’s, though this came with a qualifier in that the moratorium on price increases would only be for the year. But beyond that, it would be up to the government to decide whether or not there is higher charges in terms of airport taxes and the likes for those who travel on cost effective carriers.

But the high cost of building and operating the new terminal has already forced AirAsia to include an additional RM3 fee passed on to consumers booking tickets with them. So , not only did the new airport cos Malaysia Airport Holdings Berhad (MAHB) a veritable king’s ransom – it’s going to cost budget vacationers too.

On their website, the airlines explained what the charge is and why they are required to charge it. In response to why the particular fee is charged, the website describes: “klia2 Fee is charged to offset the mandatory klia2 facilities fees imposed by the airport authority. ” RM3 is not a princely amount by any means but who’s to say where such additional fees will finish? It’s as clear as the Klang River at present if anymore fees will be added and how many other air carriers may start including such fees to offset the cost “imposed by the airport terminal authority. ”

Even though many who have seen the new airport terminal commend its snazzy exterior plus facilities – it remains to be seen whether or not the RM4 billion was truly cash well spent.

This was brought you by MICHELLE BROHIER from RinggitPlus. com. RinggitPlus compares credit cards, personal loans and mortgage loans to help Malaysians get more for their cash.

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