Business

Hanthawaddy International Airport Project to Begin Next Year

By Aung Thiha 11 July 2019

YANGON—The long-postponed, Japan-backed Hanthawaddy International Airport project will start next year, Deputy Director-General U Ye Htut Aung of the Ministry of Transport and Communications told The Irrawaddy.

The Civil Aviation Department, the Yangon Aerodrome Co Ltd—which operates Yangon International Airport—and Japanese government officials, led by the deputy transport minister, have held five rounds of talks on the airport project, located near Bago, 80 kilometers north of Yangon, he said.

“If we reach agreements on basic points, we will be able to sign the contract within the first three months of 2020,” U Ye Htut Aung told The Irrawaddy.

The Japanese government has offered to provide official development assistance (ODA) loans for all the costs of the project on the condition that Japanese companies can build and operate the airport.

“Previously Japan said it would provide ODA loans to cover 50 percent of the costs as a Japanese company won the tender, and it said it would provide loans for 100 percent of the costs if Japanese companies can both build and operate the airport,” he said.

A South Korean consortium led by Incheon International Airport Corporation won the tender that was first called in 2012. As the consortium failed to put in the required investment in the set period, a new tender was called in 2014 and was won by a Japanese-Singaporean consortium that included Changi Airports International.

The initial agreement was cancelled after negotiations failed over details of the project. Local media reported that Yangon Aerodrome Co Ltd opposed the point that all international airlines will only use the new airport after its opening. Other complications included the need for ground transport links between the airport and Yangon.

“If the country becomes [more] developed and there are more airlines, it will need an airport bigger than Yangon International Airport. It is good that Hanthawaddy Airport will be built. But there is a need to build transport links so that the airport is accessible not only from Yangon but also from other towns like Pyay,” said urban planning expert Dr. Kyaw Latt.

“In some countries there is a plane landing every five minutes. Yangon airport can’t be expanded to reach that capacity,” he said.

Yangon International Airport has recently been expanded to be able to serve over 10 million passengers a year, but the Ministry of Transport and Communications estimates that the airport’s full passenger capacity will be exceeded in the next four to five years.

Hanthawaddy International Airport, upon completion of the entire project, will be able to serve 30 million passengers per year, according to the Ministry of Transport and Communications.

“It is even better for the government if they [Japan] invests 100 percent. It takes years for projects with huge investment to break even. If the government puts money in such a project, it will lack money to use in other sectors,” economist U Hla Maung told The Irrawaddy.

The cost of the airport is estimated to be between US$1.5 billion and $2 billion, and the airport will sit on 9,000 acres of land owned by the government.

The Construction Ministry and the Japan International Cooperation Agency are also holding talks to link the new airport with Yangon via expressway and express railway.

Translated from the Burmese by Thet Ko Ko.

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