MAHB hands over F1 rights to Khazanah

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MAHB hands over F1 rights to Khazanah
by Gan Yen Kuan
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KUALA LUMPUR: The government has undertaken a crucial initiative towards the restructuring of Malaysia Airports Holdings Bhd’s (MAHB) financials by transferring the latter’s roles in the Formula 1 championship to the former’s investment arm, Khazanah Nasional Bhd.

Two of MAHB’s units are novating their liabilities, responsibilities and performance under their respective agreements with Formula One Administration Ltd (FOA) to Khazanah’s subsidiary, Pantai Morib Ventures Sdn Bhd (PMV).

This comes more than four years after MAHB first proposed to dispose of the Sepang F1 Circuit and Sepang International Circuit Sdn Bhd (SIC) to the Ministry of Finance for RM389.35 million, which would be set off against the concession fees due to the government.

MAHB is owing the government over RM800 million pursuant to the concession agreement on KL International Airport between its subsidiary Malaysia Airports (Sepang) Sdn Bhd and the government.

MAHB said yesterday its units Malaysia Airports Management & Technical Services Sdn Bhd (MAMTS) and SIC had separately entered into deeds of novation and variation with FOA and PMV.

It said the government of Malaysia had instructed for the novation of the rights and obligations of MAMTS and SIC to PMV.

MAMTS entered into an agreement with FOA on Oct 18, 1996, where it was granted the permission to host the event of the FIA Formula One World Championship from 1999 to 2005.

An amendment agreement signed on April 3, 2001, between FOA and MAMTS allowed the latter to extend the term of the first agreement for another five years to 2010.

MAHB said the novation would enable MAMTS “to focus on its core businesses which involve the outsourcing and offering of airport management services in the airport industry and to manage major international airport projects”.

As for SIC, it signed an agreement with FOA on April 23, 1999, and was granted the television broadcasting rights relating to the FIA Formula One World Championship.

SIC signed an amendment agreement with FOA on April 3, 2001, with FOA to extend the licence period of the broadcasting rights to Dec 31, 2010.

MAHB had earlier said the operations of SIC and the ownership of the Sepang F1 Circuit did not fit into the company’s medium-term strategic plan.

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Sepang ready for night race

KUALA LUMPUR: Malaysia's Sepang Formula One circuit will be ready for night racing next year, media reports said yesterday. Mokhzani Mahathir, chairman of Sepang International Circuit, told the New Straits Times newspaper that discussions were underway to stage night racing at the 5.542-km track on the outskirts of the city.

Singapore is due to host the first ever Formula One night Grand Prix in September on a street circuit.

"We are studying and looking for the best system as there is no one single lighting technology that can fit all tracks.

"The system must be custom-made for the Sepang circuit," Mokhzani said.

"We are now in discussion with companies which offer such system."

F1 supremo Bernie Ecclestone is encouraging Asian circuits to introduce night racing to cater for European fans who due to the time difference are barely awake when cars are on the starting grid for Asian Grands Prix.

Four Asian venues are holding day races in 2008, Malaysia, Bahrain, Japan and China. The Australian Grand Prix kicks off the season on March 16.

Mokhzani said Sepang would put in place a different system from the one used by Singapore, which is a street circuit.

The Singapore set-up is expected to generate 3.2 million watts of power and use 108,423 metres of cable. The strength of lighting is estimated to be four times brighter than that of the floodlights used in top football stadiums.

Malaysia will need similar power and Mokhzani hopes the technology can help expand Sepang's business potential.

Meanwhile, Formula One's governing body has asked teams, drivers and track owners to back a "Racing against Racism" campaign to be launched at the Spanish Grand Prix in April.

The move by the International Automobile Federation (FIA) follows abuse directed at McLaren's Lewis Hamilton, the sport's first black driver, by Spanish spectators at a recent test in Barcelona.

The same Circuit de Catalunya hosts the Spanish Grand Prix on April 27.

The FIA warned the Spanish authorities and circuits after that incident that the country's two Grands Prix - the other is in Valencia in August - could be at risk if there was any repeat.