Pahang's next growth engine: RM40bil aerospace city

KUALA LUMPUR: Pahang is positioning itself for a major economic transformation through the development of Pahang Aerospace City (PAC), a 4,856.23-hectare integrated hub expected to generate between RM30 billion and RM40 billion in development value over the next 15 years.

Pahang State Investment, Industrial Development, Science, Technology and Innovation Committee chairman Datuk Mohamad Nizar Datuk Seri Mohamad Najib said PAC would broaden the state's economic base beyond its traditional industries by attracting investments in aerospace, space, artificial intelligence (AI) and advanced mobility.

"This means Pahang is expanding its economic base into new industries," he told Business Times.

Nizar said the development would be anchored by a new international airport, but would extend well beyond aviation to create an integrated ecosystem of industrial and economic activities.

"Generally, based on the size of the PAC development, the development value should be around RM30 billion to RM40 billion over a span of 15 years," he said.

He said the new airport would form part of a wider development spanning about 4,856.23 hectares, with multiple industry clusters planned across the site.

"It is not limited to airport development alone. We have many other interesting development components that will be developed in the area," he said.

Nizar said these included aerospace and aeronautics industries, maintenance, repair and overhaul (MRO), AI-powered data centres, drones, unmanned aerial vehicles (UAVs), electric vertical take-off and landing (eVTOL) aircraft and a Space City.

He said the proposed international airport alone was expected to have a gross development cost of between RM1.2 billion and RM1.6 billion and would be designed to cater to two million passengers annually.

"The airport will be an international airport under ICAO Category 4C, with a runway of 4.1 kilometres and a width of 67 metres.

"We are designing the airport to cater for all types of narrow-body aircraft, particularly those commonly operated in Asean, while it will also be able to cater for wide-body aircraft operations," he said.

He said the airport would also support cargo-related operations, including connectivity with Kuantan Port, while providing greater capacity compared with the existing airport.

Nizar said the new airport was necessary, as the existing Sultan Ahmad Shah Airport had limited flight operations due to shared airspace with the Royal Malaysian Air Force.

"The existing airport is limited because we share the airspace with the Royal Malaysian Air Force, so flight operations are very limited.

"If we move to this site, we will have more space for international aviation, and it will become an international-status airport," he said.

The new airport is targeted to begin operations in the fourth quarter of 2031, although other components of PAC are expected to be developed and operationalised earlier.

Nizar said development would be implemented in parallel across three broad phases, rather than sequentially, with some components expected to begin operating as early as 2027.

"The main timeline is the airport, which is expected to operate in the fourth quarter of 2031. But not everything will be completed at that time.

"We expect around 60 to 70 per cent of the development to be completed by around 2035," he said.

CHERATING GATEWAY TO TAP ECRL, DATA CENTRE POTENTIAL

Nizar said the transit-oriented development (TOD), known as the Cherating Gateway, would be among the first components to move forward, with activities expected to begin in February 2027.

He said the TOD would be directly connected to the East Coast Rail Link (ECRL) station and was intended to stimulate economic and social activity around the railway connection.

"Cherating Gateway is actually more orientated towards TOD and the economic accelerator programme, which is tied to the development of the East Coast Rail Link.

"The function of Cherating Gateway is that from the ECRL route, we will stimulate the economy, social activities and commercial activities in the area," he said.

Nizar said the Cherating Gateway would include a motorsports complex, commercial and shopping components, a convention centre, residential development and a data centre precinct.

He said about 161.87 hectares had been allocated for data centre operators, with several operators currently conducting feasibility studies.

"The advantage of PAC and the TOD is that we are located very close to the submarine cable," Nizar said.

He said from the PAC site to the Asia Pacific Cable Network (APCN) submarine cable, the distance is only 4.6 kilometres.

"This gives a significant advantage to data centre operators in terms of connectivity," he said, adding that the overall development could take between 10 and 20 years to reach full maturity, given its scale.

APCN is an international submarine fibre-optic telecommunications cable system connecting major Asian markets, including Malaysia, Singapore, Indonesia, Thailand, the Philippines, Hong Kong, Taiwan, South Korea and Japan.

Nizar said that the PAC was expected to create about 12,000 employment opportunities and accommodate around 50,000 residents as the development matures.

He said the project was intended to create higher-value economic activities and employment opportunities to retain skilled Pahang-born talent in the state.

"We cannot continue to depend on Pahang's traditional industries. We cannot always rely on palm oil, low-technology manufacturing, forestry, minerals and natural resources.

"It is time for us to expand into new industries and new technologies such as these. We want highly educated Pahang children to remain in Pahang and contribute to the state's economic development," he said.

Nizar said PAC would comprise seven industry-based precincts, with four already approved while discussions remained open for the remaining three.

The four approved precincts comprise the airport, MRO, Space City and an Advanced Mobility Park.

"The seven precincts refer to the pillars of the industry. We have the airport, MRO, transit-orientated development, Space City and Advanced Mobility Park, among others," he said.

He said the remaining areas included a data centre, commercial development and a proposed free trade zone, with discussions still ongoing with the relevant authorities on policy and bonded-warehouse requirements.

Nizar said the MRO component was intended to provide additional capacity for aircraft manufacturers and operators, particularly for testing and verification activities.

He said operators in Subang currently faced limitations because of high traffic levels, which made certain testing activities difficult to conduct.

"This is why PAC is being established. The MRO area will allow manufacturers and operators to conduct testing and verification in Pahang," he said.

For the data centre component, Nizar said about 161.87 hectares had been allocated and its proximity to submarine cable infrastructure was one of the key advantages being offered to potential operators.

He said data centre operators from Europe and Hong Kong were currently conducting feasibility studies.

"Being as close as possible to the submarine cable is very important for them. That is one of the advantages we have," he said.

Nizar said the advanced mobility park would focus on emerging areas including drones, UAVs and eVTOL aircraft, forming part of the low-altitude economy.

He said the development was also intended to establish a wider space economy ecosystem, including satellite manufacturing and potential launch-related activities.

"We are introducing new industries that previously did not exist on a large scale in Pahang, such as MRO and the low-altitude economy based on drones and UAVs, as well as the orbital and space economy.