1 Year Minimum Until Call for Upgrade, Transfer of Airports: Official

By Kyaw Hsu Mon 24 December 2014

RANGOON — A government call for the upgrading and privatization of 30 domestic airports in Burma has been postponed until late next year at the earliest, due to ongoing efforts to transfer three international airports to private hands, according to Win Swe Tun, the director general of the Department of Civil Aviation (DCA).

The DCA announced in November 2013 that it would put out a call for private domestic or foreign companies to upgrade and take over operations at 30 out of the country’s 69 domestic airports.

More than one year since the department invited the private sector to submit Registry of Interest papers, Win Swe Tun told The Irrawaddy on Wednesday that the plan would be delayed at least 12 more months.

“We are going to transfer all of Mandalay [International] Airport to a Japanese firm this coming March, so there are still two airports to be done before issuing domestic airports tenders, so it will be delayed until the end of next year,” Win Swe Tun said.

Last month, the government announced that Japan’s Jalux Inc. and Mitsubishi Corp., and a subsidiary of local firm Yoma Strategic Holdings, were granted the license to upgrade and operate Mandalay International Airport at an estimated cost of US$100 million.

“So after transferring Mandalay Airport, we need to discuss further the Yangon and Hanthawaddy airport transfers to private companies. It will take time, we expect that it will all be done next year,” Win Swe Tun said.

Singapore’s Yongnam Holdings has been awarded the contract to construct the Hanthawaddy International Airport, a project about 50 miles north of Rangoon that is expected to cost $1.5 billion. A subsidiary of the Burmese conglomerate Asia World was awarded a $150 million contract to upgrade the current Rangoon International Airport.

The DCA director general said Wednesday that his department would be looking for detailed plans from bidders.

“We want to encourage the private sector to prepare precise master plans for their proposed airports before submitting the application to us. They still have time, it should include details on how much they can invest and how they plan to operate the airports,” Win Swe Tun said.

The DCA had received hundreds of Registry of Interest applications by early this year, but Win Swe Tun said many were lacking in specifics. When the department has completed the transfer of the three international airports in Mandalay and Rangoon, it will ask interested parties to reapply.

According to the DCA, Nyaung U (Bagan), Heho (Inle Lake), Thandwe, Sittwe and Dawei are Burma’s busiest domestic airports, and received the most interest from bidders. On the other end of the spectrum, some airports among the 69 are not even currently operational for want of sufficient passenger demand.

“So we will have to reconsider whether we still need to spend government funds to operate these airports in future,” Win Swe Tun said.

According to the DCA, the government currently spends about $12 million annually on running its 69 domestic airports.

Most airports in Burma are small, potentially hazardous and lack sophisticated technology, following decades of mismanagement and neglect under the previous military regime.

Phyo Wai Yar Zar, chairman of the Myanmar Tourism Marketing Board, said that services at Burma’s domestic airports were lagging behind even smaller regional neighbors like Cambodia and Laos.

“Domestic airports’ services are weak, and a lack of sanitation systems around airports are an annoyance for passengers as well. Even in Yangon International Airport, there is betel nut liquid around the [luggage] conveyors,” he said.

“We can’t complain to the government about these things, but I hope that if private companies are allowed to operate these airports as soon as possible, it may cost [passengers] more but will provide better services and a cleaner environment,” he said.

The DCA hopes to sign public-private partnership agreements in which private investors agree take over airport management and upgrade infrastructure and technology. The agency would continue to be responsible for airport security and air traffic control.