Developer for RM7bil Kulim airport drops out

 

An artist’s impression of the proposed Kulim airport terminal. The project is part of the proposed Kedah Aerotropolis industrial hub. (Facebook pic)

GEORGE TOWN: A developer entrusted to build the proposed RM7 billion Kulim international airport has dropped the project at the urging of the Kedah government.

A high-level Kedah official, in confirming this to FMT, said the request was heeded by developer ECK Development Sdn Bhd (ECK) in May.

The official said the company had failed to complete paying a deposit to the government for land acquisition, which would come to at least RM2 billion.

The official said seven to eight other interested parties are now vying for the airport project, which is being vetted by KXP Holdings Sdn Bhd, a state-owned special purpose company to manage the airport.

FMT has sought comment from ECK.

Kedah menteri besar Sanusi Md Nor exchanging documents with Khor Eng Chuen, managing director of the Kulim airport developer ECK Group, last August. (Kedah MB’s office pic)

The official said the Kedah menteri besar had asserted in the state assembly that failure to meet the terms of the project would render the earlier deal null and void.

“So now, the company is forced to bow out from the project,” the official told FMT.

In April, the company had denied an accusation by Pejuang president Mukhriz Mahathir of making windfall profits from the project without paying a single sen for the project.

The company denied entering into a housing deal as alleged, saying it had paid what was due and “we have not made any profit or got any benefit”.

ECK and Ivory Properties Group were reported by The Star to have agreed to develop a housing project on 54 hectares (135 acres) of land at the Aerotropolis project.

ECK signed a deal with the Kedah government on Aug 2 to build the airport on a 1,700ha site near Sungai Petani. It is expected to handle 15 million passengers per year once completed.

The company agreed to spend RM6 billion for the first phase of the airport project, including the cost of land acquisition, with a further RM1 billion to be spent on the last phase, which includes an “Aerotropolis” mixed-development project.

The state had earlier said it expected the first flight in the airport as early as 2026.

In April, Sanusi said the federal government had no objection to the project as it was being carried out as a private finance initiative.

However, the Penang chief minister said in May that all airport projects were on hold pending completion of the national airports strategic plan by the transport ministry. “So whether it is the Penang airport expansion project or a new airport in Kulim, till now, there are no approvals for either project,” Chow Kon Yeow told the state assembly. - FMT