I AM retired without a pension. I depend on my EPF savings to live. EPF is struggling to pay higher dividends as the government demands that it invests domestically while foreign investments bring superior returns.

The financial considerations to justify the privatisation of Malaysia Airports Holdings Bhd (MAHB) should be open to scrutiny. Khazanah Nasional Bhd and EPF will need to pump about RM5 billion to raise their share in the group to 70%, if there is indeed a need to increase their shareholding.  Surely, EPF account holders and fund managers would like to know the answers to critical questions about the deal.

The new investors must also guarantee outstanding debts of RM8 billion so it’s not a clean deal.

MAHB has posted first quarter results showing a four-fold increase in profits mainly due to traffic growth. Are future increases in taken into account when arriving at the valuation?

What are the key terms of the joint venture agreement? Global Infrastructure Partners has made a statement saying the company will play the role of technical partner. Are there pre-emptive rights or tag-along provisions? If there is a need to build new airports in key growth areas? Will MAHB manage these airports?

MAHB management has performed quite well except for a few hiccups.

In 2021, MAHB awarded a contract to Pestech International Bhd for an automated people mover and ancillary work in KLIA. The contract was to run until 2034 but it was terminated in 2023 because of issues of non-performance and delays.

Yet Pestech was appointed contractor for the aerotrain replacement project with Alstom and IJM Corp Bhd, which is acquiring a controlling block of 44.83% equity interest in Pestech.

It is not rocket science to operate airports, and the new investor does not have a sterling performance to show. Last year, the Sydney airport lost AUS$600 million while the Gatwick and Edinburgh airports received many complaints.

Do we need to spend RM5 billion to buy expertise and sell off substantial shareholding to a foreign entity? Expertise has an expiry date.

Aren’t we sacrificing minority shareholders in exchange for a giant company that will influence the operations of MAHB?  Are we condoning monopolistic practices?

The prime minister has said that the cabinet does not interfere in the investment matters of EPF, Khazanah, and Permodalan Nasional. Speaking at the 47th American Malaysian Chamber of Commerce  annual general meeting luncheon recently, Anwar Ibrahim said: “We made it very clear that Malaysia must remain an open trading nation… and therefore, the collaboration between MAHB and the GIP to us is critical. We as a government will support (the collaboration).”

Meanhilw, the speaker has yet to decide on the matter after receiving two motions in parliament. Even some ruling party members want the government to scrap the deal.

Notice, I have not touched on national security and the genocide in Gaza. Hamas has more urgent matters to think about. This is a matter of economics and governance. And I believe the boards of Khazanah and EPF are on the same page with me.

What say you? – July 2, 2024.

Saleh Mohammed reads The Malaysian Insight.