The final agreement for the construction of Hantharwady International Airport, located in the outskirts of Yangon, will be signed by Myanmar’s Department of Civil Aviation (DCA) in early 2018

Myanmar's Department of Civil Aviation (DCA) is set to sign the final agreement for the construction of Hantharwaddy International Airport in early 2018, the agency’s deputy director general told The Myanmar Times.

The new airport, located on the outskirts of Yangon, would be able to handle more passengers and it will have modern facilities, according to DCA deputy secretary general U Ye Htut Aung.

The Yangon International Airport’s optimal capacity is 2.7 million passengers but there were already three million passengers who entered used the airport in 2013, he added.

The potential for the existing Yangon airport to expand is limited and it can no longer accommodate the increasing number of aircrafts. Hence, the government needs to construct a new airport to fulfil the demand.

The DCA has announced in the last week of October 2014 that Singapore-based Yongnam-CAPE-JGC Consortium as the winning tender for the construction of the Hantharwaddy airport, which can accommodate up to 12 million passengers a year.

The DCA had hoped to start construction in 2016 and intended to begin operations in 2022 at an estimated cost of US$2 billion (K2.72 trillion).

The Yongnam consortium allocated US$1.44 billion for the investment and the Myanmar government hopes to invest $222 million. The DCA seeks to source the balance of the financial support through loans from Japan International Cooperation Agency (JICA) and other international institutions.

“At present, we and Yongnam have formed a negotiation committee and have already met three times. We will have our next meeting in the first week of July,” said U Ye Htut Aung.

He added that the committee wouldl be discussing the consortium’s responsibilities and the DCA responsibilities.

Depending on the result of the meeting this month, the DCA will present the plan to the minister and then to the cabinet. They can sign the agreement after they have received approval from the cabinet, he added.

“‘We hope to sign the final agreement in January, 2018,” U Ye Hthut Aung said, adding that it is only after the signing of the agreement that the government can negotiate a loan with JICA.

“We will propose to JICA after we have a discussion on how much JICA will give for a loan and how they will get paid,” he continued.

The new Hantharwaddy airport is a 9690-acre-wide facility located near Kyauk Taing Kan village in Bago city. Its runways can accommodate aircrafts as large as an Airbus 380s and it will be equipped with the latest air traffic control systems and communications equipment.

The project first started in 1994 and was contracted with Archon & Inter Regional Investment Limited  but the company was not able to put up with the required $8 million Performance Bank Guarantee within 45 days after the contract was signed.

Although the government waited for some time, the company failed to raise the money and the agreement was cancelled in 2001— the whole project was suspended in 2003.

The Myanmar Investment Commission (MIC) revived the project and called for tender, choosing seven companies. In 2013, the MIC chose Incheon Airport Consortium as a primary tender and Yongnam-CAPE-JGC as a secondary tender. But in the end, the government chose the latter as the project’s developer.

(The Myanmar Times: http://www.mmtimes.com/index.php/business/26646-new-hantharwady-airport-to-finalise-plans-in-early-2018.html )

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