The other side to the Tioman airport deal



Yesterday, Tan Sri Vincent Tan offered to build a new airport on Pulau Tioman at no cost to the Government of Malaysia (GoM). According to the Berjaya group chairman, the construction was his way of helping the newly minted Pakatan Harapan government manage the national debt, which, according to Prime Minister Dr Mahathir Mohamad, was to the tune of RM1 trillion.

“We are looking for an infrastructure project and will propose to the government,” he said, adding, “We want to finance the project ourselves with loans from banks.”

“We won’t burden the government. We understand the country’s finances are not in the best shape now. We are willing to work with partners, to privatise and finance it, but the government can arrange it.”

The proposal isn’t without irony.

On the 16th of August 2003, weeks prior to leaving the office of Prime Minister, Mahathir got the (then) Second Minister of Finance, Dato’ Dr Jamaludin Jarjis, to announce the construction of the airport at Kampung Paya, a village just 10 minutes away by boat from Vincent’s Berjaya Resort. Jarjis estimated the cost to be around RM500 million and explained that the estimate included costs to reclaim land at the beach.

 “The EIA report is expected to be ready in a few months and if everything goes as planned, the construction of the new airport will start by the end of the year,” he said.

But it never did.

However, the GoM did complete feasibility studies and confirmed the cost estimate to be worth RM500 million. The scope of work included the construction of a 3km road that was supposed to join an existing carriageway in close proximity to Vincent’s resort. According to the students, the airport runway would cater only for small and medium sized crafts and support a limited number of flights daily.

And that brings me to my point:

Vincent put the ‘revised’ cost of construction at RM1 billion and says he’s willing to fork out the amount. But how long is he willing to wait before he sees a Retun of Investment (ROI)? Is he hoping to recover the RM1-odd billion within the next 20 – 30 years from tourist arrivals alone? Did nobody tell him that the runway would only cater for a minimal number of flights daily and could only accommodate small and medium-sized crafts?

We were made to understand that a hidden deal involving the reclamation of land is being negotiated between Mahathir and Vincent. We were told that the Prime Minister is engaging with the Berjaya chairman in a land-swap deal akin to those undertaken by Lim Guan Eng back when he was Chief Minister of Penang. Could any of this be true?

Could it be that the government is ‘donating’ parts of Pulau Tioman just to compensate Vincent for the cost of construction?