MAHB Privatisation: What Value Can GIP Really Add?

The privatisation of Malaysia Airports Holdings Berhad (MAHB) has been a hot topic since discussions began in 2023. The consortium led by Gateway Development Alliance (GDA), with Global Infrastructure Partners (GIP) as a technical partner, seems to be moving forward. But what does this mean for the current shareholders, and more importantly, for Malaysia?

Privatisation is touted as the optimal strategy to safeguard and enhance Malaysia’s airport infrastructure. Amir Hamzah, one of the proponents, argued that GIP’s involvement would bring operational expertise, long-term investments, and adherence to corporate governance. However, as we scrutinise the deal, several questions emerge about the real value GIP brings and the potential trade-offs for Malaysia.

The Case for GIP: Promises and Questions

GIP’s involvement is framed as a game-changer. With a team of 38 professionals and experience managing airports like Gatwick, Edinburgh, and Sydney, the consortium believes it can elevate MAHB’s performance. But how credible are these claims?

The performance of airports under GIP raises concerns. Gatwick was ranked the second-worst airport in the world in 2023, Edinburgh faced significant delays, and Sydney struggled with slot management and operational disruptions, resulting in a net loss of nearly $600 million. Can a partner with such a track record truly enhance Malaysia’s airport infrastructure?

MAHB’s Current Strengths

Contrary to the narrative of underperformance, MAHB has shown remarkable growth and resilience:

1. Operational Excellence: KLIA achieved a perfect score of 5.00 in the Airports Council International (ACI) Global Airport Service Quality Rankings, surpassing 355 airports globally.

2. Robust Growth: Passenger traffic reached 101.2 million as of September 2024, with a net profit of RM606.16 million for the first nine months of FY2024, more than doubling the previous year.

3. Strategic Collaborations: MAHB signed MoUs with Beijing Daxing International Airport and Selangor’s Menteri Besar Inc for development projects, strengthening its global and local presence.

4. Infrastructure Development: Major upgrades are underway at Penang, Kota Kinabalu, and Kota Bharu airports, funded by MAHB without government guarantees, showcasing financial independence.

Additionally, KLIA has emerged as a key player in global aviation, ranking as the second-most connected airport globally and leading in low-cost carrier connectivity.

The Financial Implications

Privatisation introduces complexities. The consortium will likely rely on Khazanah and EPF, who together hold 70% of the new entity, effectively utilising public funds. This raises concerns about the alignment of objectives between new shareholders and the nation’s interests.

Moreover, with MAHB already delivering strong financial results, does privatisation sacrifice long-term gains for short-term benefits for the incoming shareholders?

What Game Can GIP Offer?

Despite GIP’s promises, MAHB’s current achievements suggest it is already on a path of growth and excellence. The question remains:

• What specific operational improvements can GIP offer that MAHB cannot achieve independently?

• Will the proposed privatisation compromise corporate governance, given the strategic importance of Malaysia’s airports?

• Is Malaysia foregoing financial gains for the benefit of private shareholders, while public institutions like Khazanah and EPF bear the risks?

Unity and National Interest

As the privatisation moves forward, it is critical for the shareholders of the new setup to align their objectives with the nation’s interests. Airports are strategic assets, and decisions regarding their future must prioritise Malaysia’s long-term economic and infrastructural growth over external influences.

In conclusion, while privatisation might appear as a strategic move on paper, the evidence suggests MAHB is already a strong performer. Malaysians must question whether this exercise is truly in the country’s best interest or merely an avenue to redistribute financial gains to new stakeholders.

What say you?