Malaysia Airports Holdings Bhd (MAHB) (5014) will spend some RM105 million this year on its soon-to-be-launched airport management venture in Istanbul's Sabiha Gocken International Airport. MAHB has paid about RM80 million for its 20 per cent stake in the project, RM25 million of which was settled in 2008.

A further RM50 million will be spent by the end of the year, to complete expansion works.

The new terminal and apron, which was completed in 18 months, some 12 months ahead of schedule, will be officially launched by Turkey's prime minister on October 31

The airport operator will fund the investment from its own coffers. "At the moment, due to its initial stages, the revenue contribution is quite minimal, mainly coming from technical and consultancy fees. We don't expect revenue from dividends to come in until at least five years after completing the expansion works," MAHB managing director Tan Sri Bashir Ahmad told Business Times via e-mail recently.

In 2008, the Istanbul Sabiha Gocken Uluslararasi Havali-mani Yatirim, Yapim Ve Isletme As (ISG), a joint venture among three companies - MAHB, Limak Holding and GMR Infrastructure Ltd - won the bid for the project.

The ?343 million (RM1.7 billion) project, comprises the completion of a new international terminal building, a car park building as well as the construction of a hotel and a VIP annexe.

MAHB's 20 per cent stake in the joint-venture company entitles it to have two representatives on the board of ISG, currently held by Bashir and MAHB's chief financial officer Faizal Mansor. A few of MAHB's senior officials, who include Bashir, are also heading airport working committees.

The international terminal building project concession is for a period of 20 years.

"With two international airports in Istanbul, Ataturk on the European side and Sabiha Gocken on the Asian side, we see great potential in the airport," Bashir said.

MAHB's analysis shows that Ataturk has growth constraints due to space limitations while Sabiha is the second largest airport with a growing surrounding population and plenty of space for future expansion.

As at August 20009, Sabiha Gokcen was the fastest growing airport in Turkey and, maybe, Europe with 35 per cent growth in passenger traffic compared to the same period last year.

The venture is the third of its kind for MAHB, which already has equity stakes in two other airports overseas - Hyderabad International Airport and New Delhi International Airport.

On whether there are any plans for similar investments, Bashir said while it is looking at a few possibilities, no decisions have been made.