New role for LCCT

By Sharen Kaur
Published in NST on May 1, 2014

INVESTMENT PLAN: MAHB to spend up to RM200m turning terminal into global cargo and logistics hub, say sources

MALAYSIA Airports Holdings Bhd (MAHB) will spend  RM40 million to RM200 million to transform the Low-Cost Carrier Terminal (LCCT) in Sepang into a global cargo and logistics hub.

    The  investment will depend on the requirements for the said hub, according to people with knowledge on the matter.

    "If a large luxury jeweller or pharmaceutical group wants to come in, then the investment will be RM200 million as it will require tighter security and faster processing. But if only smaller industries want to utilise the hub, MAHB will retain the whole shell with  upgrading costing about RM40 million.

    "MAHB will do whatever it takes to get the investment so that shareholders' dividend wont't be affected," said one of the sources.

    The sources said MAHB's aim is to turn the LCCT into one of Malaysia's major cargo and logistics hubs, and help local logistic players to be the "future DHL of Southeast Asia".

    DHL is a global market leader in the logistics industry.

    According to the source, the transformation of  LCCT will take place soon after all the  airlines have moved to the Kuala Lumpur International Airport 2 (klia2).

    Malindo Air, the Philippines' Cebu Pacific Air, Singapore's Tiger Airways and Indonesia's Mandala Airlines and Lion Air will move to klia2 today, while the AirAsia Group will relocate on May 9.

    "As soon as all the airlines have moved to klia2, MAHB will make plans to  redevelop the LCCT," another source said.

    The source said MAHB has received offers from local and institutional funds to  fund the development in return for a stake in the project.

    These include Permodalan Nasional Bhd and  Employees Provident Fund.

   "Currently, valuable cargo and lower-end products go to Singapore.

   "MAHB hopes that with the transformation of the LCCT into a modern cargo and logistics hub, it will attract some of the players, especially those who are moving expensive cargo," the source added.