Privatising MAHB: a risky deal that undervalues Malaysia’s future

 

From Danial Zamberi

The proposal to privatise Malaysia Airports Holdings Bhd (MAHB) at RM11 per share has sparked intense debate. As Malaysians, we must ask ourselves: Are we undervaluing our national assets, and what does this decision mean for the country’s future?

MAHB is not just another company, it serves as Malaysia’s key gateway to the world, connecting millions of travellers annually, supporting our thriving tourism industry and driving economic growth.

With its current financial strength and potential, why are we rushing into privatisation? And why at RM11 per share, when experts believe its true value lies between RM16 and RM18 per share?

MAHB’s recovery and growth

Let’s take a closer look at the numbers. In 2023, MAHB achieved a revenue of RM4.91 billion, which represents 94.3% of pre-pandemic levels. The company also recorded a net profit of RM543.2 million – more than double the previous year’s performance.

These figures are testament to MAHB’s resilience and ability to recover from one of the aviation industry’s most challenging periods. Why then would we consider selling such a vital national asset, especially at a price that undervalues its worth?

The case for privatisation: benefits or risks?

Proponents argue that privatisation can bring efficiency, expertise and new investments. The consortium proposing this deal includes Khazanah Nasional, EPF, Global Infrastructure Partners (GIP) and the Abu Dhabi Investment Authority (Adia). GIP, a major player in airport management, has handled airports like Sydney, London Gatwick and Edinburgh.

While GIP’s experience is impressive, its track record is not without flaws. For instance, Sydney airport faced significant financial challenges during the pandemic and was heavily leveraged even before the crisis.

Moreover, airports managed by GIP such as London Gatwick and Edinburgh have not significantly outperformed Kuala Lumpur International Airport (KLIA) in global rankings. Do we want to risk embedding these financial and operational vulnerabilities into our national aviation infrastructure?

What privatisation could mean for Malaysians

Privatisation of MAHB could have unintended consequences. Airports are not just profit-making businesses; they are public infrastructure that support tourism, trade and regional connectivity.

If profitability becomes the main focus, Malaysians might face higher passenger and airline fees, reduced connectivity to less profitable regions and a decline in service quality. Can we afford to prioritise private profits over the needs of the rakyat?

The transparency dilemma

Another pressing concern is the lack of transparency surrounding the deal. Why is this process being expedited? Who benefits most from this privatisation? These are questions that deserve honest answers before any decisions are made. Malaysians have a right to know how this deal will affect not just MAHB but also the broader economy and aviation sector.

Alternatives to privatisation

No one is saying that MAHB is without flaws. Delays in infrastructure upgrades, such as KLIA’s aerotrain, highlight areas for improvement. However, selling a thriving national asset at a discount is not the solution. Strengthening governance, implementing management reforms or forming strategic partnerships can address these issues while keeping MAHB under national control.

Strategic goals and controversies

The consortium plans to delist MAHB to streamline decision-making and accelerate investment in infrastructure. The deal values MAHB at RM18.26 billion (approximately US$3.9 billion), with Khazanah holding 40%, EPF 30% and GIP and Adia sharing the remaining 30%.

However, critics point to geopolitical concerns, including BlackRock’s indirect involvement through its acquisition of GIP, and potential transparency issues in the privatisation process.

While proponents claim privatisation will improve KLIA’s global ranking (currently 71st) and attract more international partnerships, the risks of undervaluing a national asset and prioritising private profits over public interest cannot be ignored.

What’s at stake

This debate is about more than just numbers. It reflects our values as a nation. Do we want to preserve and improve our national assets, or take the easy route of selling them off?

MAHB is more than an economic driver, it is a symbol of Malaysia’s global connectivity and a cornerstone of our growth. Selling it at RM11 per share, well below its estimated value, is a decision that could have long-term consequences for Malaysia’s aviation industry and economy.

A call for caution

The government must halt this deal and conduct a thorough review. Malaysians deserve transparency, accountability and safeguards to ensure that any decision aligns with the nation’s best interests. If privatisation is pursued, it must come with clear conditions to protect public welfare and ensure that MAHB’s true value is realised.

This is not the time for rushed decisions. It is a moment to reflect on what kind of Malaysia we want to build – one that values its assets and invests in its future, or one that sacrifices long-term growth for short-term gains. Let’s make the right choice for MAHB and for Malaysia. - FMT

Danial Zamberi is the chief sustainability officer of MY Mobility Vision.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.