Kaygarn No Comments

Full list of bank that won’t compound interest during BNM’s 6-month loan holiday

1. OCBC Bank (Malaysia) Bhd
OCBC said it will not be compounding interest and profit on mortgages and loans for SMEs during the period.

This means that these customers will not be charged any interest on the interest that arises from the moratorium period, it said in a statement.

“These are both trying and uncertain times. So we are seeking to alleviate our customers’ burdens as much as we can. Although compounding might be allowed for, we have elected not to do so in light of the pressing circumstances,” said OCBC Bank chief executive officer Datuk Ong Eng Bin.

2. Malayan Banking Bhd (Maybank)
Maybank also announced that it will not compounding interest for all individual, SMEs and non-retail and corporate customer loan facilities that qualify for the loan moratorium.

It noted that its fixed-rate hire purchase loans already do not have compounding interest, while eligible products under the moratorium include personal, mortgage, ASB, education and SME loans.

All Islamic financing facilities’ profit rates are already not compounded in line with Shariah principles.

“The bank hopes that with this additional measure, it will be able to provide them further relief from their financing obligations for this period and help them weather the other challenges they may be facing. The Covid-19 pandemic is an unfortunate situation and the bank is taking this opportunity to do the right thing in line with its mission of humanising financial services. Maybank is committed to relieving its customers’ distress during these trying times, and to allow them to focus on what matters most, which is their family and health,” it said.

3. CIMB Group Holdings Bhd
CIMB Bank and CIMB Islamic Bank are also waiving compounded interest and/or profit on its deferred loan and financing repayments.

For individual customers, eligible Islamic and conventional products under this moratorium include ASB Financing, home financing, auto financing and personal financing (Express Cash, Cash Plus Loan and Awam-i).

Whereas for SME customers, the moratorium applies to all existing term loans/financings and industrial hire purchase.

“CIMB welcomes the proactive measures announced by Bank Negara Malaysia to support Malaysians who are experiencing financial constraints during this challenging period. As a financial group that has always prioritised the well-being and advancement of people and communities, we hope this will help our customers who are faced with financial adversities and allow them to focus on other more critical areas of their livelihood,” said CIMB Group chairman Datuk Mohd Nasir Ahmad.

4. RHB Bank Bhd
RHB Bank Bhd will not be compounding interest for its retail and SME customers during the moratorium period.

The bank said that interest for all retail and SME banking facilities would not be compounded during the moratorium period, with instalment payment amounts remaining unchanged upon the conclusion of the six months.

RHB Banking Group managing director Datuk Khairussaleh Ramli said these additional measures introduced by BNM in partnership with the banking industry provides critical relief to ease the financial burden of individuals and businesses, particularly the SMEs, during this extremely challenging period.

5. Public Bank Bhd
Public Bank will not be compounding interest on monthly instalment payments for loans held by individual and business customers.

For Islamic financing, profit will continue to accrue on the outstanding principal amount; however, it will not be compounded, in accordance with Shariah principles.

“Following Bank Negara Malaysia’s announcement on March 25, 2020, Public Bank further extends the relief assistance to its customers by not charging any compounding interest on the interest that accrues during the moratorium period

“With the escalating Covid-19 outbreak, Public Bank is very concerned about its impact on the nation and hopes this extended financial assistance will provide additional relief to its customers,” said Public Bank managing director Tan Sri Tay Ah Lek in a statement.

6. AmBank and AmBank Islamic
AmBank and AmBank Islamic will not be compounding interest or profit on loans and financing during the six-month pause on loan repayments.

“We welcome BNM’s recent move to provide flexibilities for banking institutions like AmBank to respond speedily to customer needs in times like this. It is our responsibility as a trusted homegrown financial institution to come to the aid of our customers in their time of need. Forgoing compounding interest on top of the six-month payment deferment initiative and the credit card balance conversion programme is our way of giving back,” said AmBank Group chief executive officer Datuk Sulaiman Mohd Tahir in a statement.

7. Affin Bank and Affin Islamic Bank
Affin Bank Bhd and its Islamic counterpart Affin Islamic Bank Bhd announced that they will not be compounding interest and profit for term loans and term financing during BNM’s moratorium.

In line with BNM’s guidelines, all retail and SME customers from both banks will be enrolled in the six-month deferment automatically.

For Islamic financing facilities under Affin Islamic Bank, profit rates are already not compounded, in line with Shariah principles.

“As the current situation is both challenging and filled with uncertainties, we hope the gesture announced today can make this difficult time easier for the customers and communities we serve. We are also committed to consistently identify more ways we can best help our customers”, said Affin Bank chief executive officer Kamarul Ariffin Mohd Jamil via a statement today.

8. Standard Chartered Bank Malaysia Bhd and Standard Chartered Saadiq Bhd
Standard Chartered Bank Malaysia Bhd will not be compounding the interest on its conventional loans while profit on Islamic financing by Standard Chartered Saadiq Bhd will not be compounded, in compliance with Shariah law, during the six months.

Products included in the automatic loan deferment programme are personal loans/personal financing-i, residential mortgage/Saadiq MyHome-i or Saadiq MyHomeOne-i and commercial mortgage loan/BizProperty Equity-i and business instalment loan/guaranteed instalment loans/biz-financing-i.

“The uncertainty caused by the pandemic has left many individuals and businesses in the lurch and this is our way of helping them cope and navigate through this tough period,” said managing director and chief executive officer Abrar A. Anwar.

HSBC Malaysia announced non-compounded interest or profit during the moratorium period for retail and SME customers.

10. Alliance Bank
Interest on conventional loans will not be compounded during the moratorium period.

Profit for Islamic financing is not compounded but the interest/ profit on the deferred loan and financing repayments will continue to accrue during the 6-month period.

Other banks includes the following. However, please do contact your Bank for more details as each  bank T&C is different and subject to change without prior notice.

Kaygarn No Comments

Bank Negara grants six-month grace period for loans (updated)

KUALA LUMPUR: Banking customers, including individuals and small and medium sized enterprises (SMEs) will be allowed to delay the repayment of their existing loans, including mortgages and hire-purchases, for a period of six months.

This is part of the central bank’s new measures to assist borrowers experiencing temporary financial constraints due to the Covid-19 outbreak.

In a letter to the heads of financial institutions today, Bank Negara said the automatic moratorium will be effective from April 1.

“Banking institutions should provide individuals and SME borrowers with adequate information on how the suspended loan/financing repayments/payments will be treated during the moratorium period,” the central bank said.

The automatic moratorium is applicable to ringgit-denominated loans or financing that are not in arrears exceeding 90 days as at April 1, 2020.

The moratorium does not apply to credit card balances.

For outstanding credit card balances, Bank Negara said customers should be offered the option to convert the outstanding balances into term-loan of not more than three years.

“For corporate borrowers, banking institutions are strongly encouraged to facilitate requests for a moratorium,” the letter stated.


Kaygarn No Comments

Cost saving purchases via auction

KUALA LUMPUR: Malaysia’s auction market is booming as properties are usually offered below market prices, auctioneer Ng Chan Mau & Co Sdn Bhd said.

Ng Chan also said the evolvement of online publicity had increased public awareness on the industry.

Its business director Low Chee Hian said Bank Negara Malaysia’s move to reduce its Overnight Policy Rate by 25 basis points from 2.75 per cent to 2.50 per cent on March 3 had boosted investors interest in properties.

“Auctions can boost property demand as people opt for cost-savings purchases amid tough market,” he said at a press conference in conjunction with RHB Bank Mega Auction Fair here today.

Auctions also provide access to products information for bidders while promoting a straightforward transfer of ownership, Low added.

He, however, cautioned newbies to contact and obtain accurate information directly from reputable auctioneers to avoid any unfortunate circumstances.

Ng Chan expects RM11 million sales would have been generated within two hours of the start of RHB Bank Mega Auction Fair today (Thursday).

Low said the bulk of the auction sales would have been contributed by properties (RM10 million) and vehicles (RM1 million).

He said there were a total of 150 onsite bidders and 50 e-bidders participating at Ng Chan’s Hybrid Auction fair for both properties and vehicles.

Hybrid Auction allows bidders to pay auction deposit online using FPX (Internet-based payment gateway), allowing real-time payments for online purchases and bid online from any location.

“We have 130 mixed-properties priced up to RM1 million and 80 cars priced between RM20,000 and RM80,000 were put on auction,” Low said.

He said bidders/purchasers can immediately proceed to change of ownership, upon “fall-of-hammer” for the (auction) once their sales were concluded.

“The auction is held at market value and subsequently prices can be reduced if there is no successful bidder or taker,” he added.

Bidders can also enjoy savings of up to 30 per cent subject to take up rates.

Low said reserve price which falls too low would attract more bidders to increase their biddings.

Source: News Straits Times

Blog Post

Kaygarn No Comments

NPL growth may overtake loan growth

PETALING JAYA: Non-performing loan (NPL) growth for banks in Malaysia could be higher than their loan growth this year as the industry deals with the economic fallout from the coronavirus (Covid-19) outbreak.

S&P Global Ratings projects the NPL ratio could peak to between 1.7% and 1.8% of outstanding loans this year compared with 1.5% as of Dec 31,2019.

The ratings house also revised down its credit growth forecast for Malaysian banks, from the previous 3%-5% to 1%-3% in 2020.

S&P Global Ratings credit analyst Nancy Duan said: “The global outbreak of Covid-19 and renewed domestic political uncertainty add obstacles for Malaysian banks, which are already grappling with the effects of a slowing economy and dampened investor and consumer sentiments over the past year.”

In particular, the global health emergency and domestic political upheaval are affecting oil prices, consumer confidence and the broader economy in Malaysia.

S&P Global Ratings’ forecasts are based on the assumption that the Covid-19 outbreak will subside and the domestic political stability can be restored over the coming months.

Should these risks prolong beyond the second quarter of 2020, the forecast figures would need to be revisited.

A banking analyst disagrees with the assumptions of the foreign credit agency and expects loan growth in 2020 to be about 4%, in line with gross domestic product (GDP) growth.

“Looking at the 1.6% NPL ratio recorded in January 2020, there could be a slight uptick going forward.

“This will depend on the depth of external factors apart from Covid-19, such as the US-China trade tensions, which is still ongoing, ” he said.

When asked if the overnight policy rate (OPR) cuts can help boost loan demand, the analyst opined that this would be dependent on market sentiments, as further rate cuts may not translate to improved consumer purchasing power.

Kenanga Research, in a sector report, said accommodative interest rates will continue to support a resilient household loan segment, alleviating the moderation in business loans.

Given the banks’ modest target for 2020 after the recent results season, the research house forecasts loan growth at 4% to 4.5% for the year, driven by resilient household and business loans, with a fiscal push expected in the second half of the year.

“The soft interest rate regime is expected to support loan growth coupled with ease of application.

“While the uptick in impaired loans is a concern, it is still below its five-year peak of 1.67% in February 2015, ” said Kenanga Research.

Meanwhile, S&P Global Ratings also expects more potential easing from Bank Negara to support the economy, leading to a further five to 10 basis point compression of banks’ net interest margin in 2020.

“Our base case assumes stable capital adequacy ratios.

“However, risks are now tilted to the downside, given added drains on profitability and the rising dividend payouts announced by some banks last week, ” it said.

On the government’s RM20bil stimulus package, S&P Global Ratings expects it to have a neutral impact on local banks.

“Supportive policies in the package could strengthen lifelines to banks’ affected clients.

“However, we feel the special credit facility of RM2bil is more symbolic than material, and that credit demand will weaken visibly, especially over the first half of 2020.

“Transitory asset-quality problems could become permanent if the severity and duration of the disruptions were prolonged.

“This in turn would eventually push up banks’ credit costs – meaning the allocation of provisions for impaired and potentially impaired loans, ” the credit risk research house noted, projecting sector-wide credit costs to be 20 to 25 basis points of total loans in 2020.

It is interesting to note that Malaysian banks’ direct exposure to the most disrupted sectors by Covid-19, such as hotels, restaurants and airlines, is small, at only a single-digit percentage of loan books on average.

Duan added that Malaysian banks are fundamentally strong, backed by low NPL ratios, light credit costs, and large capital buffers.

“The banks’ credit profiles have remained solid despite muted profitability in recent years. Conditions in 2020 will put the banks to a much bigger test to their resilience, ” she said.

Source: TheStar


Blog Post

Kaygarn No Comments

US firm Lam Research to invest RM1 billion in Penang

GEORGE TOWN: A big-name semiconductor equipment manufacturer from the United States plans to invest close to RM1 billion to build a factory in Batu Kawan, Penang, in the first quarter of this year, providing 350 high-value jobs when it opens in 2021.

Lam Research, a supplier of wafer fabrication equipment and services to the semiconductor industry, will open its eighth factory on a 138ha site comprising offices, manufacturing facilities and a warehouse. It will cost US$225 million (RM922.5 million).

It has factories in countries such as Austria, South Korea and the US.

In announcing the investment today, Chief Minister Chow Kon Yeow said Lam Research’s entry would provide a significant boost to the thriving electronics and electrical (E&E) ecosystem in the state.

“It will have far-reaching impact, especially on supply chain localisation opportunities, which will, in turn, better the skillset of the technical workforce,” he said in Komtar today.

Lam Research senior vice-president (global operations) Kevin Jennings said it made perfect sense to open in Penang as the electronics and electrical ecosystem here was robust.

“We are the market leader in atomic-level processes critical to semiconductor scaling and manufacturing. In Penang, we will spend about US$150 million and will commit another US$75 million in incremental value for warehousing.

“We are excited to join Penang and partner with the Malaysian government as we add to our global footprint,” he said via a Skype call at the event.

Lam Research, a Fortune 500 company, had revenue of US$9.5 billion in 2019.

Penang already has renowned E&E companies such as Keysight Technologies, National Instruments, Bruker Corp and Agilent.

Source: FreeMalaysiaToday

Kaygarn No Comments

Several infrastructure projects in Penang to take off this year

GEORGE TOWN: The Penang government regards 2020 as an important year for the state as several state infrastructure projects will take off in the next 12 months.

Chief Minister Chow Kon Yeow said among the projects that will start this year are the Penang airport expansion, construction work on the redevelopment of the Swettenham Pier Cruise Terminal and package two of the Penang Transport Master Plan (PTMP).

“All these infrastructure projects are expected to start this year, and if not start work then a signing agreement and tender processes will also take place,“ he told reporters after flagging off the City Walk here today.

He said these projects would spur the state economy by providing more jobs and contracts to the relevant sectors.

Chow said these infrastructure projects would also attract more investment to the state.

“What we announced last year will probably move into the construction phase this year, before jobs can be created.

“But jobs would have been created for those announced two years ago,“ he said.

Chow, who is also the state assemblyman for Padang Kota, said the state government has nothing to hide regarding the Package 2 project PTMP linking Bandar Baru Air Itam in Farlim to Tun Dr Lim Chong Eu Expressway here.

He explained that all details of the projects have been included in the environmental impact assessment (EIA) display, including the 19 affected graves at the Batu Lanchang cemetery.

“I have got nothing to hide regarding the project and it is all in the EIA display. If people do not take it out, what can we do? Only they (Gerakan) took a long time to find out,“ he said.

Chow was commenting on the claim by Gerakan that the state government was hiding the fact as it was not mentioned earlier that the project would affect 19 graves in Batu Lanchang.

Last Monday, the state government announced that several meetings were held with the United Hokkien Cemeteries Penang at Batu Lanchang to discuss the status of some more than 100-year-old graves that will be affected by the project. — Bernama

Kaygarn No Comments

KPKT ready to cooperate with state govt on rent-to-own scheme

The Housing and Local Government Ministry (KPKT) is prepared to assist state governments in the sale of affordable houses developed by state governments through rent-to-own financing scheme.

Its Minister Zuraida Kamaruddin said efforts to ensure more people own houses are being carried out by both the federal and state governments.

However, some self-employed buyers have problems applying for bank loan as they do not have income statement.

“Those who work on their own were able to buy houses and join the rent-to-own scheme we introduced in September and we hope to help more people especially those in the B40 would be able to own houses.

“Under the rent-to-own scheme, tenants who pay rent on time for five years would be offered to buy the house under the schemes,” she said.

Zuraida told a media conference after launching Syarikat Perumahan Negara Bhd (SPNB) affordable houses here today which was attended by its chairman Mohammad Mantek who is also KPKT secretary-general.

KPKT, according to Zuraida, is open about forging cooperation with state governments and landowners in the construction of affordable house if the site was suitable.

Commenting on the project, Zuraida said it would be developed via a design and build concept with private financing initiative on a 59-hectare site involving the construction of 1,422 units of houses in three phases over seven years.

He said the first phase would be starting in January and is expected to be completed in three years involving 186 units of double-storey link houses (349 units) and single storey shops (12 units).

The location of the houses was seen as strategic as it is near to the Sultan Ahmad Shah Airport, Gambang water park, army camp and public universities apart being not far from Kuantan.

“We also made it a policy so that affordable houses are built to meet the specification of at least 900 sq ft to ensure the comfort of buyers,” she said.

Zuraida said the project was part of the commitment of the government to fulfill the pledge to build one million affordable houses in 10 years as found in Pakatan Harapan’s general election manifesto.

Source: The Edge

Blog Post

Kaygarn No Comments

What causes the penny pinch?

Despite Malaysia’s low inflation rate, many still struggle to get by. Why is this so? The World Bank’s latest Malaysia Economic Monitor report highlights areas that may contribute to our high cost of living.

MALAYSIANS say they are struggling to get by financially with the prevailing perception being that that cost of living is cripplingly high.

This is despite the fact that Malaysia experiences consistently low rates of inflation. Headline inflation averaged less than 2% per year since January 2015 and moderating to less than 1 per cent since January 2018 – well below the growth rates of the economy and average nominal incomes.

Why then, are Malaysians feeling the pinch?

In its latest Malaysia Economic Monitor (MEM) report released on Monday, the World Bank Group Malaysia identified four factors that impact the cost of living and may account for Malaysians’ difficulty in making ends meet.

They are (i) inadequate income, (ii) insufficient affordable housing, (iii) high household debt, and (iv) consumer price inflation differentials.

Inadequate income

According to the Gallup World Poll, as of 2018, nearly 30% of Malaysians felt that they do not have enough money for food and 23% reported having inadequate money for shelter.

In fact, the World Bank found that approximately 27% of households in Kuala Lumpur earn less than Bank Negara’s 2016 estimated monthly living wage – RM2,700 a month for a single person, RM4,500 for a couple without a child and RM6,500 for a couple with two children in the city.

Although median incomes continue to outpace inflation, the MEM report found that wage growth for the youth and workers without tertiary education has been slow-moving.

How do we bring down costs?

According to Khazanah Research Institute’s (KRI) director of research Dr Suraya Ismail, government-led social programmes have a positive impact on consumption expenditure by lowering living costs.

“The expenditure for households will be lower in countries where the provision of government services is extensive and cover households’ basic needs. Examples would include universal healthcare, free formal education, subsidised childcare and subsidised mass transportation systems, ” she says in an email interview with Sunday Star.

One way to finance these initiatives is through progressive tax.

“As reported in MEM, the total tax revenue is only 14% of GDP. This is not enough even when compared to international benchmarks. More could be done to increase this percentage, by increasing taxes on personal wealth as well as the top income earners, ” says Suraya.

Apart from progressive tax, the MEM suggests increasing stamp duty on purchases of higher-value properties and widening the scope of the real property gains tax.

Sunway University Business School economist Professor Yeah Kim Leng believes that the issue of low wages can be overcome by raising the quality of the education system, improving industry competitiveness and productivity, and accelerating the shift to higher value, knowledge-based and technology-driven activities.

“This will require sound, prudent macroeconomic management that not only ensure a stable price environment but a well-functioning economy that engenders investor confidence, ” says Yeah, who is also Malaysian Economic Association Deputy President.

“Investor confidence will lead to sustained domestic and foreign investment that in turn generates the demand for skilled and high-paying jobs, thereby creating a virtuous cycle of investment, employment and wage growth that banishes the low wage-high living cost conundrum, ” he explains.

Furthermore, Yeah suggests that given the country’s low labour income share, companies that achieve a certain minimum profitability could be encouraged to adopt the shared prosperity goal.

In this model, B40 employees would be given greater emphasis in salary and wage allocation of company budgets and performance incentives.

“A 10-10 “double happiness” formula of at least 10% annual salary increase and a bonus of at least 10% of the employee’s annual salary would not only address increase employees’ morale but also contribute to a more equitable society, ” he says.

Variation in consumer price inflation

In Malaysia, living costs vary significantly depending on geography. The MEM report found that although household incomes tend to be higher in high-cost areas like Kuala Lumpur, oftentimes the extra income is not enough to fully offset higher prices.

This is why many in urban areas say that they feel especially burdened by high costs.

Suraya explains that costs of living will always be more pronounced in urban settings, hence why the calculation of living wage for families are normally calculated for a specific metropolitan area.

“This is to give an indication to both families and employers the comparatively high costs of living in cities. For families, this the compensation needed to attain a decent life in this area and for firms, this is the price to retain good talent, ” she says, explaining that food, shelter and transportation are the three main contributors to the high costs of living.

She says that the price of housing and food items need continuous monitoring by the government to ensure they remain competitive.

The MEM report also recommends the development of a spatial price index in addition to a cost of living index can also help consumers manage their finances.

Shortage of affordable housing

According to the MEM report, various studies have found that housing affordability has deteriorated over the years to the point that overall housing is considered “seriously unaffordable” in Malaysia using the price-income ratio (PIR) as a measure.

The report found that the lack of affordable housing is particularly severe among households earning less than RM5,000. Furthermore, only 18% of newly-launched home units in 2016 were priced below 200,000.

Apart from prioritising low to middle income households in current housing policies, the MEM points out that Malaysia can strengthen the rental market by enacting the Rental Tenancy Act, establishing a Tenancy Tribunal and developing a rental database and rental affordability indicators.

“The MEM mentioned that since 2004, real growth in employment income for 20-29 year-olds with post-secondary education has been marginal. The ensuing age cohorts; 30-39,40-49,50-59, fared better during the same time. If the trend suggests that wage stagnation occurs during this period for the youth (20-29), it is prudent not to purchase any big-ticket items on debt or loans (cars and houses included), ” says Suraya.

Instead, she illustrates how more can be done to assist this group with the provision of affordable rental facilities and efficacious public transport systems.

The Institute for Democracy and Economic Affairs (Ideas) Senior Fellow Dr Carmelo Ferlito takes a step back and questions whether Malaysia should even implement policies to improve home-ownership.

“How much the problem is a real one and how much a perceived one? Let’s not take PIR in isolation. Let’s look at PIR in combination with the fact that home-ownership rate is 76% and household debt is 82% of GDP, ” he says in an email interview with Sunday Star.

“Should we address the former figure or the latter? Probably household debt is more an issue than homeownership. Have we reflected on the fact that there is a rising number of unsold affordable housing? We should reflect more broadly on the factors of such weakness of demand: how much is really due to prices (as affordable units go unsold) and how much to a change in the system of preferences, which means with new generations preferring mobility to stability, traveling today rather than building a house for tomorrow?, ” he questions.

“I think that if we allow the market to correct itself, rather than trying to interfere with its readjustment process, the market will provide the necessary solutions, ” he says.

However, Ferlito believes that the government should eventually focus on addressing the shelter issue for those most in need, the B10, not by forcing them to get a home loan but by implementing supported rental schemes.

Source: The Star

Kaygarn No Comments

RM34.8m maintenance fund for Penang under consideration: Jagdeep

GEORGE TOWN: The Housing Ministry is considering to allocate RM34.8 million from two maintenance funds to Penang, according to state Housing, Local Government and Town and Country Planning Committee chairman Jagdeep Singh Deo (pix) today.

He said that a total of 44 out of 133 housing maintenance projects in Penang were “given commitment to consider an approval” for the funding from the Housing Maintenance Programme (PPP) and the Housing Maintenance Fund (TPPM) during a meeting at Putrajaya on Dec 9.

“Eleven out of 12 projects proposed were considered for approval under the PPP fund for RM23 million.

“Meanwhile, 14 projects from the Penang Island City Council (MBPP) and 19 projects from the Seberang Perai City Council (MBSP) were also considered approval under the TPPM scheme for RM4.8 million and RM7 million respectively,” he said in a press conference here.

He also said that the state government would receive an official response from the federal government by February next year.

“If we do allocate that much based on what’s considered to be approved, Penang might be one of the biggest beneficiaries for the housing maintenance fund,” he added.

Under the Budget 2020 announcement, Finance Minister Lim Guan Eng announced that a total of RM100 million would be set aside for both TPPM and PPP funding scheme altogether.

On Nov 14, Jagdeep said that an application letter was sent to Minister of Housing and Local Government Zuraida Kamaruddin on Aug 30 to request a total funding of some RM100 million comprising PPP (RM28 million) and TPPM (72 million) for maintenance and upgrade of the housing facilities in Penang.

According to him, the maintenance funds would be used to repair, replace and upgrade housing facilities with priorities given to lifts, water tanks and roofs. – Bernama

Blog Post

Kaygarn No Comments

Penang airport gears up for upgrade

GEORGE TOWN: The Penang International Airport in Bayan Lepas, already bursting beyond its capacity, is expected to undergo much-needed expansion following the nod given to Malaysia Airport Holdings Bhd (MAHB) from the local authorities.

MAHB received planning permission and early work commencement approvals from local authorities for the airport expansion project, estimated to cost between RM800mil and RM900mil.

Construction work is scheduled to start in March, and is expected to be completed within 36 months.

Announcement on the expansion project is expected to be made by the Penang state government or airport authorities soon.

The Penang Island City Council (MBPP) recently gave its greenlight on Dec 4, and it is expected to approve the building plans next month.

When contacted, a spokesman for MAHB confirmed that the masterplan has been approved by the MBPP.

“However, we are still waiting for the official letter from them.

“Announcement will be made by top management when the official letter is received, ” he said.

It is learnt that MAHB is expected to offer the tender for construction jobs in January.

The expansion will increase the terminal gross floor area to 113,005 sq m from 54,582 sq m.

The new design will have the capacity to accommodate 12 million passengers per annum while the two-way passenger peak hour capacity will increase to 4,391 from 2,553 currently.

The expanded airport will be able to accommodate 25 commercial aircraft.

The Air Traffic Control Tower, Civil Aviation Authority of Malaysia, Meteorological Station, the Airport Fire Rescue Service station and aviation apron will be relocated to the new terminal.

The number of parking bays will be increased to 1,800 bays from 1,218 presently.

The catering complex and MASKargo Complex will remain at the existing terminal.

In July, MAHB chief executive officer Raja Azmi Raja Nazuddin said it is ready to proceed with its plan to expand the Penang International Airport after getting approval from the Ministry of Finance.

He had said MAHB has been working on the expansion project over the past two years, bringing in consultants to draw up detailed construction plans after engaging with the Ministry of Transport (MoT), Malaysian Aviation Commission (Mavcom), the Penang state government and Chief Minister Chow Kon Yeow.

Raja Azmi had also said the plans were ready for submission in July for planning from the MBPP after necessary clearance from Mavcom, MoT and the Department of Director-General of Lands and Mines (Federal) as the landowner, ” he said.

MAHB had said it was discussing with various parties on the options for investment and funding models.

The airport operator said it had submitted an application to fully fund the project under the proposed Mavcom Regulated Asset Base (RAB) framework and was waiting for approval.

Once the necessary plans have been approved by the MBPP, construction should begin in the first quarter of next year, the MAHB had said.

Meanwhile, Penang Freight Forwarders Association (PFFA) honorary secretary-general Ali Ahmad said the airport authorities should consider integrating the Second Cargo Complex in Batu Maung and the MASkargo Complex in Bayan Lepas.

“The two cargo complexes, separated by the runway, has caused inconvenience to freight forwarders.

“Freight forwarders now incur additional charges such as the cost of transferring cargo from one terminal to another, ” he said.

Ali added that the airport and local authorities should explore linking the proposed LRT system with the cargo complexes to reduce the traffic at the cargo complexes.

Source: The Star

Blog Post