The Public Accounts Committee (PAC) has blamed the lack of proper business planning for under-utilisation of the RM185 million over-the-budget baggage handling system at KL Sentral.

The baggage handling system is located at the KL-City Air Terminal at KL Sentral and is linked with the KL International Airport via an electric train service.

NONE "There was no thorough discussion on the business model, it was not solved at the time," its chairperson Azmi Khalid told reporters after leading the committee's fact-finding walkabout at the two terminals of the system, the transportation hub in the heart of Kuala Lumpur and at KLIA in Sepang.

"We are urging those responsible to settle this matter immediately," said Azmi, who announced the PAC finding after more than two hours of briefings and on-site inspection of the system by its members.

The Padang Besar MP was referring to the failure of Malaysia Airports Holdings Bhd (MAHB) to fully utilise the system as it is embroiled in deep negotiations with the world governing body on air travel, the International Air Travel Association (IATA) on extra costs for moving baggage on the now derelict outgoing baggage handling system.

Insurance and extra costs incurred

"The issue here is insurance and extra costs, which must be incurred if the baggage from disembarking passengers are sent directly to KL Sentral," Azmi explained.

The issue of insurance and costs requires an agreement signed at the international level with IATA to allow the movement of baggage carried on air carriers under the Global Distribution System, or GDS, from the point of arrival in KLIA to the KL-City Air Terminal at KL Sentral.

"When the cabinet made the decision to create the new baggage handling system, the decision was made without considering the business and efficiency aspect of the system. This is the problem.

“Prior to any cabinet decision, we need a holistic approach, to consider not only the technical aspects, but also the business and commercial sides of things," lamented PAC deputy chairperson and Kepong MP Tan Seng Giaw.

The system, which can transport 24,000 bags daily, carries only 6,000 in a day, which means only 25 percent of the capacity is being used, noted Tan.

"We were the first country to nominate an off-site checkout facility. Malaysia is the first. We wanted to do something different. I guess other countries are now learning from (our mistake)," said PAC member and MP for Kota Belud Abdul Rahman Dahlan.

NONE Teluk Kemang MP Kamarul Baharin, who also sits on the committee said MAHB also failed to take into account that with the LCCT being built for low-cost carriers, the total passenger volume or "load" at the KL-City Air Terminal would be noticeably lower.

However, despite these hiccups, Azmi said, the system was technically sound and capable of full functionality.

"The only issue is the lack of volume," he said, stressing that the system was not "unutilised" as claimed by some, but only "under-utilised" and not a "total waste".

Originally costing RM165 million, the project cost was bumped up by RM19 million to correct "electrical supply issues". The total cost in public funds so far has been RM184 million.

Another RM40 million was paid for by MAHB using internal funds to link and modify the high-speed tray baggage handling system to not only serve the KL Sentral-KLIA Satellite baggage transport route but also to assist the existing older conveyor belt system in bringing baggage from the satellite building to the KLIA terminal.

Abdul Rahman believes the RM40 million sunk into linking the high-speed tray system to feed into the normal baggage handling lines was "necessary to save" the under-utilised system as it was up to specifications and technically capable of doing its intended job.

Another PAC member, Tony Pua, was concerned whether MAHB would be able to recoup the cost of the project as it was under-utilised and without proper planning.

"This was a project done without proper planning. It is a serious matter which is prevalent in the many projects pin-pointed by the Auditor-General Report. I hope that this will be discussed more thoroughly in the PAC," Pua said.

The walkabout by the members of the PAC at KL Sentral and KLIA marked the start of their probe into irregularities pointed out in the recently released Auditor-General's Report for 2010.

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