Business

Burma Awards Contracts to Build, Expand International Airports

By Saw Yan Naing 12 August 2013

RANGOON — Burma has awarded contracts to expand two existing airports and build a new international airport, amid the growing demands of tourism in a country which expects to see annual foreign arrivals rise from about 2 million to 7 million by 2020.

A contract to expand Burma’s main international airport, Yangon International Airport, has been awarded to a consortium led by Pioneer Aerodrome Services Co., an affiliate of the major Burmese conglomerate Asia World, which is run by Steven Law, who is still on the US sanctions list.

Steven Law, also known as Tun Myint Naing, is the son of the recently deceased Burmese drug kingpin Lo Hsing Han. US companies are forbidden from doing business with him due to his connection to Burma’s former military regime and involvement in the illicit drug trade.

Malaysian and Singaporean companies are also part of the consortium to expand the airport near Burma’s biggest city and commercial capital, Rangoon.

Apart from Yangon International Airport—which currently has a capacity to handle 2.7 million passengers annually—a new international hub will be built by South Korea’s state-run Incheon International Airport Corp (IIAC).

The new hub, Hanthawaddy International Airport, will be built in Pegu, about 50 miles northeast of Rangoon. The airport is expected to handle 12 million passengers a year, according to South Korea’s transport ministry.

On Sunday, the ministry said in a statement that the final contract for the Hanthawaddy project—worth over US $1 billion—would be signed at the end of the year. The facility will be finished by 2018 and will be the country’s biggest international airport, according to Burma’s Department of Civil Aviation.

Meanwhile, a consortium of Mitsubishi Corp., Japan Airlines Corp. and SPA Project Management Ltd. won a contract on Saturday to repair and operate an international airport serving Mandalay, Burma’s second-biggest city.

Established in 2000, the existing Mandalay airport is currently a domestic aviation hub capable of handling 600,000 passengers a year. Located in central Burma, the airport flies to 12 cities across the country and saw a 20 percent growth in annual passengers last year, with 500,000 domestic passengers and some 80,000 international passengers.

Since President Thein Sein came to power in 2011, Burma has embarked on a series of political and economic reforms, prompting warming relations with the international community and a growing number of visitors. In addition to a surge in foreign tourists, the country has attracted world leaders, international investors and foreign businesspeople.

Last year hotel rooms were in short supply due to the extra arrivals, and Burma’s government warned the number of foreign visitors was set to exceed the annual capacity of 2.7 million that Yangon International Airport could handle.

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