The government will only consider green-lighting the Kedah Aerotropolis project proposed five years ago once issues raised by the air force (RMAF) and Malaysian Aviation Commission (Mavcom) are resolved, the transport minister says.
Loke Siew Fook said the RMAF had raised concerns over air traffic management, safety and defence stability.
Mavcom, on the other hand, found that there was no evidence to support KXP AirportCity Holdings’s ability to secure RM5.67 billion to finance Phase One of the project, he said.
Nor did the company have any strategy to mitigate risks related to securing investments.
He said Mavcom also found that the cargo projections provided were “overly ambitious” and that there was no demand for cargo services.
He said KXP AirportCity Holdings had been requested to submit financial projections, financial contingency plans and supporting documents related to cargo projections.
KXP AirportCity Holdings is a company wholly owned by the Kedah State Development Corporation.
“The government will consider the application once KXP AirportCity Holdings Sdn Bhd resolves the issues raised,” Loke said in a written reply.
He was responding to Khairil Nizam Khirudin (PN-Jerantut), who had asked for an update on the project’s status.
The proposal to develop the Kedah Aerotropolis was first tabled at the National Physical Planning Council in October 2020, and approved in principle.
In September 2024, KXP AirportCity Holdings submitted its application for the project and six months later, it was brought up at a Cabinet meeting.
The Kedah Aerotropolis project, designed to drive the state’s economic transformation, will be developed on a 3,965ha area at Mukim Sidam Kiri in Kuala Muda.
The project has several components, namely the Kulim International Airport, the Sidam Logistics, Aerospace and Manufacturing hub and the integrated development of commercial areas.
