02 May 2018
Japan and Myanmar are in discussions about resuscitating the failed Hanthawaddy International Airport project, according to the transport minister.
U Thant Sin Maung, Minister for the Ministry of Transport and Communication, held a meeting with Tsukasa Akimoto, Japan’s State Minister of Land, Infrastructure, Transport and Tourism in Park Royal Hotel, Yangon, on April 30. The meeting covered national infrastructure projects which Japan is interested in, including airports, ports and railway.
Japan wants to undertake the airport project speedily but they are still in consideration, owing to the investment amount, U Thant Sin Maung said, proposing a Myanmar-Japan joint committee on this task. The project is estimated to cost US$1.5 billion.
Ichiro Maruyama, Japan’s ambassador, said all parties agreed to work together on the project and both Nay Pyi Taw and Tokyo want the project to go ahead “as soon as possible”.
Previous plans to develop the proposed airport have fallen through. It was initially slated for completion by 2018, which was then pushed back to 2020.
The new airport was to have been built around 80 kilometres north of Yangon, near Bago city, by 2022, according to a framework agreement signed in January 2016 between a consortium and Myanmar’s Civil Aviation Department. The consortium includes Japan-based JGC Corp and Singapore’s Yongnam Holdings Ltd .
On February 26, Yongnam announced in a statement that an agreement to design, build and manage the planned airport has “expired”.
“The FWA has not been renewed to-date as certain issues remain unresolved,” the firm said.
In 2014, the consortium won a government tender for the design, construction and management of the airport in the form of a public-private partnership, with a concessional period of 30 years. The consortium would seek up to half of funding for the project from Tokyo’s official development assistance program, Kyodo reported.
JGC owns a 55-percent stake in the consortium while Yongnam has 25pc and Changi Airport Planners and Engineers, a subsidiary of Changi Airports International, has 20pc. Construction has not begun.
The agreement expired in January and neither side proposed an extension.
The Department of Civil Aviation, in its notification released on March 14, said Hanthawaddy is a national project prioritised in order to develop the aviation sector.
Thus, the meeting between the two ministries in Park Royal was expected to be an attempt to iron out differences.
In the past, authorities said all international flights would be moved to the new airport from Yangon International Airport (YIA). Kyodo reported that the proposed one is expected to initially handle 12 million passengers, whereas Yangon Aerodrome Co Ltd, the operator of YIA, stated that the existing one is built to handle up to 20 million passengers a year. Yangon airport managed a total of 5.92 million passengers in 2017.
The rocky ride to implement Hanthawaddy airport is not the first time Japanese investors are involved in aviation projects which did not take off. Last year, All Nippon Airways (ANA) was forced to back out of a joint venture with Golden Sky World, Shwe Than Lwin’s subsidiary, in which the Japanese airline originally was to pay US$25 million for a 49pc stake.
The deal failed to go through because Nay Pyi Taw rejected the JV’s application for an air operator’s certificate without providing a reason. ANA had been waiting for 1.5 years prior to the rejection.
ANA has since decided to shut down the JV, saying it “cannot foresee a future” in Myanmar. It has not reversed that decision. The collaboration, had it gone through, would have resulted in the country’s first partnership with an international airline.