Zairil, the state infrastructure committee chairman, said the expansion is a crucial step to accommodate increasing passenger traffic and will reinforce Penang as a key regional aviation hub to support its growing economy and connectivity.

He said the first work package, which was awarded to Gagasan Maya Sdn Bhd at a contract value of RM107 million in September 2024, has reached 31% progress and is on track for completion by November.

The package includes upgrading and construction works, covering the airport’s ancillary building, air traffic control tower, the Civil Aviation Authority of Malaysia office, and the aviation security control post.

“This project will also see the use of a remote digital virtual tower, which will make PIA the first airport in Southeast Asia to use this technology,” he said in a statement today.

Zairil said the second work package, awarded to Acre Works Sdn Bhd for RM254 million last December, is set to begin by mid-April.

The package will focus on upgrading the airport apron, taxiway, airside drainage, utilities diversion, and other related infrastructure.

“Looking ahead, the tender for the third work package is expected to be called in April,” he said.

Zairil said the third package will include the construction of a new terminal and the renovation of the existing terminal, including building services and interior design improvements.

He said the new terminal is expected to be operational by 2027 and full project completion by 2028.

In February last year, transport minister Loke Siew Fook announced that the Cabinet had approved the expansion and upgrade of PIA costing more than RM1 billion.

He said the project would be funded by Malaysia Airports Holdings Bhd and is expected to be completed within three years.