Myanmar is inviting private investors to upgrade 30 of its 69 domestic airports to improve its underdeveloped air transport capacity and infrastructure.
“We want to stop using the government budget in the coming years, so we’ve decided to call for private sector investment in local airports,” said Tin Naing Tun, the Department of Civil Aviation director general, the Irrawaddy reported on Wednesday.
Following decades of poor management and neglect under the military junta, Myanmar’s airports are small, unsafe and technologically stunted. The government spends about $12 million annually running all 69 of its airports, and the budget constraint does not allow facilities to be maintained properly, nor skilled staff to be taken on to improve the airports, Tin Naing Tun said at a press conference in Yangon, Myanmar’s commercial center.
Myanmar’s aviation sector has an accident rate nine times as high as the global average, according to Reuters, and a number of accidents occurred at airports in 2012 and 2013. When possible, many travelers opt for regional operators from other Southeast Asian nations instead of taking domestic flights.
But with Myanmar’s newly opened doors, tourism is on the rise, and the aviation industry is expected to grow rapidly in conjunction. According to the DCA, the number of passengers in 2013 will increase to 4.2 million from 3.6 million last year. By 2030, that number is expected to rise to 30 million, the Irrawaddy reported.
The DCA plans to sign public-private partnership agreements with investors, which will let the agency continue to be responsible for airport security and air traffic control, but airport management and upgrades to infrastructure and technology will be taken over by the private sector. Proposals may be submitted through January 2014, after which the DCA will invite qualified firms to apply for a government tender.
“The tender process will be fully transparent and fair; that is what we can guarantee interested people,” said Tin Naing Tun. Parliament is currently considering a revamp of the Civil Aviation Law, but this would not interfere with the process of attracting private investors.
Earlier this year, tenders to develop Hanthawaddy International Airport and Mandalay International Airport were awarded to South Korea’s Incheon International Airport Corp. and Japan’s Mitsubishi Corp (TYO:8058) respectively. In this round of bidding for local airport development, the DCA will give priority to local firms, said Win Swe Tun, the DCA deputy director general, according to the Irrawaddy.
Sophie is a graduate of Northwestern University. She covers the emerging markets in Southeast Asia, with a particular interest in foreign investment in the region....