Business : ECK has the funds to develop KXP – Muhammad Sanusi
ALOR SETAR, Feb 28 — The Kedah state government chose ECK Group of Companies (ECK) to jointly develop the proposed Kulim International Airport (KXP) as it is confident that the latter has sufficient funds to implement the project.
Kedah Menteri Besar Muhammad Sanusi Md Nor said based on the proposal paper submitted to the state government, the company successfully proved it had RM1.5 billion in funds for the first phase of the project and RM5 billion for the second phase.
“We were looking for companies that have financial capabilities. Many proposals were sent to us but the companies did not have ‘proof of fund’ or where their funds would come from. This company has proof of fund.
“On that basis, the company was appointed, on condition that it could complete the establishment of a special purpose vehicle (SPV) company within six months.
“It must pay the commitment fee of 120 per cent of the estimated cost of the land acquisition, and pass the due diligence by KXP AirportCity Holdings Sdn Bhd,” he told reporters here today.
He was asked to comment on statements by certain quarters questioning the state government’s decision to choose ECK, which they claimed did not have experience in developing airports or large-scale projects.
Muhammad Sanusi explained that the project was initially stalled due to financial setback as the federal government could not currently provide the state government with the required financing.
He said the state government then took the private finance initiative (PFI) approach by inviting interested companies to participate in the project along with KXP AirportCity Holdings which was established under the Kedah State Development Corporation.
On allegations that ECK was inexperienced in airport construction, Muhammad Sanusi said it was not an issue as the company could employ the expertise of other companies or individuals.
“We gave them six months to establish the SPV and appoint the board of directors. If it fails to in six months, we will engage another company which has financial capability,” he said.
ECK in an earlier statement revealed that it was participating in a joint venture with the Kedah state government to develop KXP and would set up an SPV to be chaired by Tunku Laksamana Kedah Datuk Seri Diraja Tunku Shazuddin Ariff Al Aminul Karim Sultan Sallehuddin.