A consortium led by Singapore-based Yongnam Holdings has won a $1.4 billion deal to build a new airport in Myanmar, the latest in a series of global deals as the country opens itself up after decades of isolation.
The consortium – comprising Yongnam Holdings Ltd, Changi Airport Planners and Engineers Pte Ltd (CAPE) and Japan’s JGC Corp – got selected by the Department of Civil Aviation (DCA) for the design, construction, operation and maintenance of Hanthawaddy International Airport (HIA) and its facilities on the basis of a public-private partnership agreement for a 30-year concession period, Yongnam said in a statement.
Following the selection process, the consortium will now enter into advanced discussion and negotiation with the DCA to finalise details and terms of the HIA project, Seow Soon Yong, CEO of Yongnam, said in a statement.
The group was invited to rebid for the project after negotiations between the government and South Korea’s Incheon International Airport Corp, which was previously awarded the deal, broke down earlier this year.
The new airport is about 90 kilometres (km) from Yangon, while the current Yangon International Airport is 15km from the city.
The facility will be operational in December 2019 and will be able to handle as many as 12 million passengers a year, compared with Yangon International Airport’s capacity of 2.7 million, according DCA.
The consortium can get official development assistance from the Japanese government with low interest rates, said Win Swe Tun, director-general of DCA. The group did not ask for any government guarantee, he added.
Airport upgrading is part of the government’s effort to create jobs in one of Asia’s poorest countries. Only three out of more than 30 airports in Myanmar are designated as international airports at present.
A flurry of tourist arrivals in Myanmar are testing the capacity of existing international airports in Yangon, the second biggest city Mandalay and the new capital, Naypyitaw. Yangon and Mandalay are currently being upgraded.
Close to five million tourists are expected to visit Myanmar in 2015, up from three million targeted in 2014, compared with two million in 2013 and one million in 2012.
Shares of Yongnam jumped 20 percent last Thursday after news came out that it won the bid.