Govt Tender for Upgrade of Domestic Airports Expected in October

By Kyaw Hsu Mon 22 April 2014

RANGOON — The Department of Civil Aviation (DCA) said it will issue a tender in the last quarter of this year inviting local and foreign companies to upgrade 39 underdeveloped domestic airports in Burma.

In November last year, DCA called on companies to register their interest and proposals for improving 30 of Burma’s 69 domestic airports. The process, which was completed in January, was not a formal bidding process but served to inform the government agency of the interest and plans of potential airport developers.

DCA’s director general Tin Naing Tun told The Irrawaddy on Tuesday that “many” companies had registered their interest, adding that most of the firms had been Burmese. “Some [companies] are proposing that they can upgrade all domestic airports… but they should only indicate which specific airport they want to upgrade,” he added.

Tin Naing Tun said DCA planned to put out a formal tender inviting companies to bid for contracts to develop the 39 airports some time “after the rainy season,” which winds down in October. “We will hold more discussions and allow them to apply to the tender later this year,” he said.

DCA announced in November that it plans to use local and foreign private investors to upgrade Burma’s domestic airports in a bid to improve the country’s underdeveloped airport capacity and infrastructure.

Private investors are expected to come with proposals to take over airport management and upgrade infrastructure and technology. DCA said it wants to sign public-private partnership agreements in which the agency continues to be responsible for airport security and air traffic control.

Currently, local airports are small, unsafe and lack sophisticated technology, following decades of mismanagement and neglect under the previous military government. According to the DCA, the government currently spends about US $12 million annually on running the 69 domestic airports.

The government hopes the plans would help develop Burma’s aviation industry and airport capacity. Air safety has become a particular concern after a number of accidents occurred at local airports in 2012 and 2013.

DCA continues to receive complaints about its domestic terminals from the growing number of domestic airplane passengers.

Soe Thura, an account director at Vero Public Relation Company, said he was a frequent flyer on Burma’s domestic routes and had encountered numerous problems and delays.

At busy but small airports like Heho, in Shan State, he said, “The airport area is quite small, there are not enough seats for passengers [to wait] and I also have problems while claiming my baggage, I have to wait a long time.”

“So domestic airports quality should be upgraded soon,” Soe Thura said.

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, from 4.2 million in 2013 to 30 million in 2030, DCA estimates.

Both international and domestic airport in Burma are set for a surge of investment and large-scale upgrades.

The government has been seeking foreign investors for the construction of 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.

The government had been in talks with a consortium led by Korea’s Incheon International Airport Corp about the Hantawaddy project, but in February it decided to also invite Singapore’s Changi Airport Group, Yongnam Holdings Ltd, and Japan’s JGC Corp to start negotiations on a tender to build and operate the new airport.

In November last year, the government awarded a US $150 million contract to upgrade Rangoon’s old Mingalardon International Airport to 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.