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Singapore-Japan Consortium Signs with DCA

A consortium comprising with Japan’s JGC Corporation, Singapore-based Yongnam and Changi Airports International has signed a framework agreement with the Department of Civil Aviation (DCA) to build a new Hanthawaddy International Airport in Bago. This signing can be seen as an important step toward the eventual inking of the Hanthawaddy International Airport concession agreement.

In October 2014, the consortium was officially named by DCA as the successful tenderer for the design, construction and management of the project of Hanthawaddy International Airport on the basis of a public-private partnership. JGC holds the biggest interest of 55 percent in the consortium, while Yongnam and Changi Airports International hold 25 percent and 20 percent respectively.

Kyaw Soe, Director at the DCA said, “We need to discuss details of the project that will take more than one year. The consortium expects to start construction in 2017 when the discussions are over. A major drawback for the project is the lack of supporting infrastructure including a connecting road between Bago and Yangon. The government, in cooperation with the Korean International Cooperation Agency (KOICA) is planning to build a road connecting the new airport with Mingaladon Airport and the Yangon Central Railway Station.” He also added, “ We are working together on the project with KOICA. They will provide $5 million to build the related infrastructure. KOICA is now assessing if the road is going to be build underground or above the ground.”

The concession agreement for the estimated $1.5 billion project is expected to be signed in the third quarter of 2016. The project is planned for completion by 2022. The site is located 80 kilometers northeast of Yangon near Bago and occupies approximately 9,000 acres. Hanthawaddy International Airport is expected to have an initial capacity of 12 million passengers per annum, making it the largest airport. Once operational, the airport will become the main international gateway into Myanmar.

A portion of the project cost will be supported by an Official Development Assistance (ODA) loan from the Japanese government, to which the Myanmar government plans to apply for, following the signing of the agreement. Further discussions will be held between the consortium and DCA upon the signing of the agreement.

With its capacity, the new airport is expected to boost the flow of business and leisure travellers as the country sees growth in trade and tourism. The development of related public infrastructure such as commercial and industrial activities is also expected to increase around Bago.