This article first appeared in The Edge Malaysia Weekly on September 5, 2022 - September 11, 2022

The on-again, off-again project to build Kulim International Airport (KXP) in Kedah could be called off again after Menteri Besar Datuk Seri Muhammad Sanusi Md Nor recently announced that a joint venture between privately held ECK Group of Companies and the state government fell through.

This follows ECK’s failure to comply with the terms of the agreement, including paying a deposit on a RM2.1 billion land acquisition.

Last month, Penang-based Ivory Properties Group Bhd also announced it would no longer be developing residential components on 135 acres in the proposed AirportCity and Aerotropolis in the state, owing to the rescission of ECK’s right to develop the proposed KXP project. This raises questions about the status of the project, where its first phase was estimated at a staggering RM6 billion — more than klia2’s cost of RM4 billion. Is the project still on?

The project has been a long time coming. The idea of a new international airport in Kedah had been mooted as far back as 2013, during a Kedah Transformation Lab. 

In 2015, the Economic Planning Unit commissioned KPMG to conduct a study to establish the need for the new airport and to identify the most suitable option for such a development. The proposed project gained momentum only in 2019, however, after the Pakatan Harapan coalition took over the government in 2018. In March 2019, then economic affairs minister Datuk Seri Mohamed Azmin Ali announced that the federal government had approved RM1.6 billion to build the airport, with KXP anticipated to create 15,000 to 18,000 jobs.

After much convincing that the new airport would not cannibalise traffic from Penang International Airport in Bayan Lepas, the project looked set to take off when the Kedah government signed a pact with ECK in July last year to jointly develop KXP.

Many contend that there are already enough airports in the country and not all airports can be profitable. Since the joint venture has fallen through, perhaps it is time to shelve, if not terminate, the project, given the government’s tight fiscal position.

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