From white elephant to regional transport hub: that’s the challenge for seven consortiums prequalified to tender for a contract to upgrade, operate and manage Mandalay International Airport as part of a public-private venture.
The Ministry of Transport’s Department of
Civil Aviation announced the list of seven consortiums, selected from
16 applicants, in the Monday, December 17 edition of the state-run New
Light of Myanmar.
The consortiums feature two to five companies,
with at least one foreign and one Myanmar firm, and the seven were
chosen based on “financial experience, experience record, qualified
personnel and equipment resources”.
Among the companies seeking
to win the tender are the operators of Munich, Dublin and Phnom Penh
airports, along with many of the county’s most well-known construction
firms, such as Htoo Construction and Asia World. Three firms linked to U
Serge Pun are in the running across two consortiums, as are Shwe Than
Lwin and Shwe Taung Development.
While the list contains a number
of companies known for their close ties to the previous military
regime, a Yangon-based civil aviation consultant told The Myanmar Times
that the relative transparency of the tender process was a positive step
forward for the Ministry of Transportation.
U Win Swe Tun,
deputy director general of the Department of Civil Aviation, said the
tender was fair because it had been managed by a consulting firm from
It is not known when the winner will be announced but U
Win Swe Tun said the tender would “hopefully” be finalised by the start
of the 2013-14 financial year, which begins on April 1.
The final selection process will be undertaken by a committee headed by Minister for Transport U Nyan Tun Aung.
to the government, Mandalay International Airport is capable of
handling three million passengers a year but receives just a handful of
international flights a week. While it was only completed in 2000, the
airport already needs significant upgrades to its electrical and water
systems, runway and runway lighting, according to the Department of
However, some argue it is in a position to
benefit from both its geographically fortuitous location and Myanmar’s
uptick of foreign visitors.
“In 10 years Mandalay could be a
regional hub on level with Singapore or Bangkok,” the Yangon-based
consultant said, noting that nearly 500 flights pass over Myanmar daily
but never touch down.
According to the Asian Development Bank,
international visitor arrivals were up by more than 25 percent in 2011,
and the annual number of visitors is expected to top the one million
mark this year.
Another potential attraction of Mandalay airport is its 25,000 acre
site, which means plenty of space for planes and maintenance facilities.
the prequalified companies last week was a consortium featuring two
Japan-based companies, Mitsubishi Corporation and JALUX Inc, with Serge
Pun and Associates (SPA) Project Management the Myanmar partner.
Munich Urban Frontier Aung Myanmar Essar consortium comprises five
companies: Flughafen Munchen GMBH of Germany, Urban Strategic Pte Ltd
and Frontier Investment and Development Advisors of Singapore, Aung
Myanmar Technology Company Limited and Essar Projects of India.
Munchen GMBH operates the Munich Airport, which according to Airport
Council International was the 27th busiest in the world last year, with
more than 37 million passengers.
INTL International Ptes, Ltd
comprises ITNL International from Singapore, IL & FS Transportation
Networks Limited of India, Dublin Airport Authority of Ireland and Htoo
Construction Co, Ltd.
Dublin Airport Authority is Ireland’s
state-owned airport authority. The company runs the country’s three
largest airports, at Dublin, Cork and Shannon. Dublin, the largest,
handled 18.4 million passengers in 2010.
Htoo Construction owner U Tay Za also owns airlines Asia Wings and Air Bagan, which both fly to Mandalay airport.
Harbour Engineering Co, Ltd is the smallest consortium in terms of the
number of companies, featuring just China Harbour Engineering Asia World
Though the majority of the company’s projects are
marine related, CHEC, a subsidiary of China Communications Construction
Company, has previous experience in Myanmar’s aviation sector. The
company constructed Myanmar’s largest airport, Nay Pyi Taw International
Airport. The US$100 million airport opened in December 2011.
World is heading up the refurbishment and expansion of Yangon
International Airport. The expansion will up the yearly passenger
capacity to 3.7 million from 2.7 million. The work is scheduled to be
completed in 2015.
AVIC International Holdings Corporation is
anchored by AVIC International of China. The Yunnan Airport Group, also
of China and Shwe Than Lwin of Myanmar round out the consortium.
Yunnan Airport Group operates 12 airports in Yunnan Province, on the border of northern Myanmar.
VINCI Airport comprises VINCI of France, Muhibbah Engineering of Malaysia and Shwe Taung Development Co of Myanmar.
prior experience in the ASEAN region comes from Cambodia. It is the
concession company for Cambodia’s three international airports, in Phnom
Penh, the country’s largest city and capital; Siem Reap, home to the
Angkor Wat temple complex; and Sihanoukville on Cambodia’s coastline.
Batiment International includes Bouygues Batiment of France, First
Pacific Company of Hong Kong, First Myanmar Investment and Yoma
Strategic Holdings of Singapore.
U Serge Pun, chairman of the SPA
Group, looks to be hedging his bets on the lucrative contract. First
Myanmar Investment Co and Yoma Strategic Holdings are two of three of
his companies spread over two consortiums. The other is SPA Project
Through its majority ownership of Hermes Airports,
Bouygues Batiment upgraded and manages Cyprus’ two international
airports, Larnaca and Paphos, through 25-year Build-Operate-Transfer
(BOT) agreements with the government of Cyprus. Bouygues Batiment was
also involved in updating Prague Václav Havel Airport in the Czech
With Hanthawaddy International Airport also under
construction in Bago, there are clear signs of progress on the ground
for Myanmar’s civil aviation sector. Myanmar’s lone state-run airline,
Myanma Airways, often confused with privately owned Myanmar Airways
International, continues to lag woefully behind.
Formed in 1948
originally under the name Union of Burma Airways (UBA), the carrier
flies only domestic routes and has been dogged by a spotty safety
Two crashes in 1998 claimed the lives of 52 passengers
and crew. More recently in June 2009, a flight from Yangon to Sittwe
suffered significant damage when the hard landing caused the plane’s
landing gear to fail. Three people were injured as the plane skidded off
the runway and into a nearby fence.
On Friday, November 23, the
British government advised Foreign and Commonwealth staff against
traveling on Myanma Airways over safety concerns. Similar concerns have
been voiced by the US State Department.
GE Capital Aviation
Services announced in September that it would be leasing two modern
aircraft to bolster Myanma’s aging fleet but it is still severely
underdeveloped when compared to the flag carrying airlines of other
The development of Myanma Airways in conjunction
with the Myanmar’s airports seems like an ideal fit, but has yet to be
“The Ministry of Transport will need to take the
chance to upgrade with the help of a foreign company. They need to be a
leader in aviation,” the Yangon consultant said.
source: The Myanmar Times