KUALA LUMPUR: The cabinet has given the green light for a new low-cost carrier terminal on a 2,800-hectare site in Labu, Negri Sembilan, Transport Minister Datuk Seri Ong Tee Keat said.
The airport will anchor Sime Darby's "massive integrated city" development in Labu, which includes five townships with services in education, health, sports, high technology, recreation and entertainment.
The RM1.6 billion terminal will be funded by Sime Darby and joint-venture partners which could include AirAsia and Malaysia Airports Bhd.
Ong said the new terminal was needed as the current facility in Sepang would not be able to cope with the increased passenger volume.
Including its Thai and Indonesian affiliates, AirAsia flew some 18 million people this year. The new terminal will be built to accommodate 25 million passengers a year, and last on present forecasts until 2030.
Ong said he could not give a timeline on when work would start on the new LCCT.
"It is up to them as to when they want to start work. For our part we will make sure there is connectivity between the Kuala Lumpur International Airport and the new LCCT.
"We want to ensure passengers will be able to move from both places speedily, smoothly and efficiently."
To be called "KLIA East@ Labu", the new terminal is slightly closer to central Kuala Lumpur than the present LCCT and will boast connectivity by both road and rail.
A 7km branch road will link it with the North-South Expressway and a 3km spur line will be built from the railway station in Labu -- a stop on the KL-Seremban KTM Komuter route.
Welcoming the project's approval, Negri Sembilan Menteri Besar Datuk Seri Mohamad Hassan said the KLIA would be connected to the new terminal by a 7km Express Rail Link (ERL).
Industry sources said a ground-breaking ceremony was being slated for late next month with construction planned for completion in two years.
When the new facility is commissioned, the Sepang LCCT, which has more than recovered its cost from the explosive increase in passenger numbers over the last two years, will serve other budget carriers, such as Singapore's Tiger Airways.
Mohamad said the siting of the new terminal near Kampung Gadong Jaya in Labu would boost economic growth in the state.
"The location is not far from the existing terminal. It will be an extension of the KLIA.
"When the airport is built, the state can expect economic development, such as housing estates and business centres, in the surrounding areas," he said.