Govt Invites Private Investors to Upgrade 30 Domestic Airports
By Kyaw Hsu Mon 20 November 2013
RANGOON — The Department of Civil Aviation (DCA) announced on Wednesday that it plans to use local and foreign private investors to upgrade 30 of Burma’s 69 domestic airports in a bid to improve the country’s underdeveloped airport capacity and infrastructure.
“We want to stop using the government budget in the coming years, so we’ve decided to call for private sector investment in local airports,” said Tin Naing Tun, the DCA director general, adding that the government currently spends about US $12 million annually on running the 69 domestic airports.
“We have problems with budget constraints; we can’t maintain airport facilities properly and cannot pay sufficient salaries to [maintain] skilled staff,” he told a press conference at DCA offices in Rangoon. “Those factors made us to decide on this plan to call for private investment.”
Tin Naing Tun said the plans would help develop Burma’s aviation industry and airport capacity. Currently, local airports are small, unsafe and lack sophisticated technology, following decades of mismanagement and neglect under the previous military government.
Air safety has become a particular concern after a number of accidents occurred at local airports in 2012 and 2013. News agency Reuters has cited an official as saying that the accident rate of Burma’s air industry is nine times the global average.
Burma’s aviation industry is expected to grow rapidly in the coming years, as the number of foreign tourist visits and domestic air passengers is projected to rise sharply. According to DCA, the number of passengers in 2013 will climb to 4.2 million, up from 3.6 million last year. In 2030, the total number of air passengers is projected to rise to 30 million.
DCA officials said they expect private investors to come with proposals to take over airport management and upgrade infrastructure and technology, adding that it wants to sign public-private partnership agreement in which the agency continues to be responsible for airport security and air traffic control.
The agency said interested companies can register their proposal throughout the month of January, after which DCA will assess proposals and subsequently invite firms to apply for a government tender.
“The tender process will be fully transparent and fair, that is what we can guarantee interested people,” Tin Naing Tun said. Parliament is currently considering a revamp of the Civil Aviation Law, he said, adding that this would not interfere with the process of attracting private investors.
Win Swe Tun, DCA deputy director general, said the government would prioritize local firms in awarding the contracts, adding, however, that investors should be able to prove they are in a strong financial position to implement their proposals.
“We heard that local businesses complained… that some foreign investors won tenders for international airports projects earlier this year, so now we’re giving them priority,” he said.
In August, a consortium led by the Incheon International Airport Corp was chosen as the preferred bidder to construct the $1.5-billion Hanthawaddy International Airport, a huge project that will serve as the second airport to Rangoon, Burma’s commercial capital and biggest city.
Rangoon’s old Mingalardon International Airport will be upgraded at a cost of around $150 million by a consortium led by a firm belonging to Asia World, which is owned by US-sanctioned Steven Law, the son of the late drug lord Lo Hsing Han.
Mitsubishi Corp is leading a group of Japanese firms that will revamp Mandalay international airport.