The new supplementary concession agreement will also enable ERL, which operates the KLIA Transit and KLIA Ekspres rail services from KL Sentral to KLIA, to implement a “market-driven” fare structure.

“Market-driven fare will free the government from the financial obligations of having to compensate ERL,” transport minister Loke Siew Fook said during a press conference here.

In a statement, ERL said the government would stop paying it fees or charges from the collection of passenger service charges (PSC) starting from 2029.

Apart from fare charges, ERL currently receives a percentage of the PSC charged for outbound international (RM5) and domestic passengers (RM1).

PSC collected from passengers at Kuala Lumpur International Airport terminals 1 and 2 are shared between MAHB and the government based on a formula. ERL gets a share of the portion the government receives.

In 2016, the government set the ceiling price at RM64. ERL has kept its fares at RM55 per trip since then.

“Under the new agreement, the government is also entitled to a 30% share of ERL’s profit, should a threshold be met,” Loke said.

The specified threshold is a 10% stakeholder internal rate of return (IRR) for the ERL.

IRR is a financial metric used to assess the profitability of an investment.

“We hope this new consensus will motivate ERL to continue its top service,” Loke said.

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