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Saudi kicks Changi Airports consortium out 10 months after it won tender

by Vincent Low

It was reported in Saudi news media yesterday (21 Feb) that the Saudi Arabia’s aviation authority, the General Authority of Civil Aviation (GACA), has kicked the consortium led by Singapore Govt-linked Changi Airports International (CAI) out from a deal to operate and manage Saudi's new King Abdulaziz International Airport (KAIA).

The announcement came 10 months after CAI proudly proclaimed in May last year that it had won the license to run the new Saudi's airport for a 20-year term.

Mr Lim Liang Song, CEO of CAI then thanked GACA for their "confidence and trust" in CAI. He said, "We would like to thank the GACA Board of Directors for their confidence and trust in CAI. This is testament to the strong partnership we have with GACA, from when we first started managing Dammam airport eight years ago. We look forward to developing KAIA into a world-class hub, to serve the residents and visitors of Jeddah and Saudi Arabia.”

With the sudden termination of the agreement with CAI, GACA obviously didn't think that its partnership with CAI is that "strong", like what Mr Lim said.

In a statement yesterday, GACA said, "Following an internal review, GACA has decided to undertake a new international tendering process for the contract to manage the airport in Jeddah. This review raised a number of fundamental concerns that has required GACA to revisit and terminate the award of the concession to the consortium."

GACA did not mention what "fundamental concerns" they had with CAI operating their new airport.

"All actions undertaken by GACA are in accordance with the terms of the executed concession agreement. The new tendering process will meet best practice standards of transparency and fairness," GACA added.

GACA said it would communicate further information on the new tendering process in due course and added that the decision would not impact the "soft opening" of the new airport in May this year.

In its defence, CAI also issued a statement to say that the consortium had strictly observed the request for the proposal process as stipulated by GACA. It said that it had submitted all required documentation for GACA’s review and had obtained all requisite approvals prior to the award of the concession last year.

Changi Airport Group run by SAF Scholar

CAI is a subsidiary of the Changi Airport Group (CAG) owned by the Singapore government.

The Chairman of CAG is Mr Liew Mun Leong whose son has been sued bankrupt for money owed to a businessman.

The Chief Executive Officer of CAG is Mr Lee Seow Hiang. He is also the Deputy Chairman of CAI. Prior to the corporatisation of CAG, Mr Lee was Deputy Director-General (Operations) of the Civil Aviation Authority of Singapore. From 2005 to 2008, he was the Principal Private Secretary to Minister Mentor Lee Kuan Yew in the Prime Minister’s Office.

From 1989 to 2005, Mr Lee held various appointments in the Republic of Singapore Air Force (RSAF) and the Ministry of Defence, with his last appointment being Deputy Head of Air Operations in HQ RSAF. His last military appointment was Deputy Head of Air Operations in HQ RSAF.

Mr Lee was awarded the SAF (Overseas)/President’s Scholarship in 1989 and the SAF Postgraduate Scholarship in 2002. He holds a Bachelor of Arts (Honours) from the University of Cambridge, UK, and a Master of Business Administration from the Massachusetts Institute of Technology, USA.