Who oversees MAHB, experts ask as Mavcom scrapped ahead of GIP-BlackRock deal

The dissolution of the Malaysian Aviation Commission (Mavcom), which was passed by the Dewan Rakyat last week, has raised questions over the oversight of Malaysia Airports Holdings (MAHB), the company responsible for the management of Malaysia's airports and is currently in the midst of a controversy over the sale of 30% of its shares to a firm owned by BlackRock, the controversial US fund manager which is facing allegations of involvement in Israeli war crimes.

Mavcom is to be merged with the Civil Aviation Authority of Malaysia (CAAM).

Aviation expert Germal Singh Khera has expressed doubts about CAAM's independence in overseeing MAHB operations, as the authority comes under the transport ministry.

"I am not really sure if it does have any independence although the transport ministry said they will guarantee the independence of CAAM. It looks like it does not have any independence," Germal, a former development director at Mavcom, told MalaysiaNow.

Mavcom was established in 2015 as an independent body regulate the commercial aspects of the aviation industry and handle passenger complaints.

Germal said Mavcom can assess the impact of procurement on the industry and stakeholders.

This is possible because mergers and acquisitions fall within the commission's jurisdiction, he said.

Last week, there was a heated debate on Mavcom in the Dewan Rakyat when opposition MPs grilled Transport Minister Anthony Loke on the plan to dissolve  Mavcom, which had been mooted as early as 2019.

Now that Global Infrastructure Partners (GIP), a company owned by BlackRock, is joining a consortium to manage MAHB, the plan raises new questions.

Opposition leader Hamzah Zainudin said CAAM and Mavcom can be given their own powers, adding that there is no need to merge the two entities.

"Why is this being done so hastily and haphazardly? There is something wrong," he said.

Perikatan Nasional MPs said Mavcom was the last bastion to prevent the sale of MAHB shares to GIP.

Besides fears that Malaysia was complicit in Israeli war crimes, protests against the sale to BlackRock-owned GIP centred on the fact that MAHB made a profit of more than half a billion ringgit last year.

Anwar had previously stated that GIP was chosen out of 145 companies and claimed that the others did not want to fulfil the conditions set by Khazanah Nasional, which together with the Employees Provident Fund (EPF) holds a 70% stake in MAHB.

The conditions include that the chairman and CEO of MAHB must be Malaysians and that the majority of shares must be held by locals.

"This condition was not accepted. That's why GIP was chosen," said Anwar in justifying GIP's involvement.

Germal said the purchase of MAHB shares by GIP must be given the green light as long as Mavcom exists and is not completely dissolved.

"If Mavcom is still there, the deal should be approved by Mavcom. Mavcom should have a look at the deal from an economic standpoint to see whether there is any violation in the aviation industry in terms of competitiveness and holding structure," he said.

Another aviation expert said that by privatising MAHB, the company is no longer accountable to anyone except its board of directors.

"CAAM only deals with the safety and technical aspects of airlines. So I wonder what the motivation for this (selling MAHB shares) is. They are just bulldozzing it," said Shukor Yusof.

Germal said that it was not unusual for investors to hold stakes in airport operators, adding that the public would not make an issue out of owning MAHB shares.

"Let's say anyone else is buying the stake in MAHB. I think nobody would say anything," he said.

"I don't think the backlash would be as big as the backlash against GIP. Unfortunately, GIP is linked to BlackRock."