Monday, 24 December 2012

Companies vie for Mandalay airport tender

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 Japan.

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.

According 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 Civil Aviation.

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.

Among 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.

The 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.

Flughafen 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.

China Harbour Engineering Co, Ltd is the smallest consortium in terms of the number of companies, featuring just China Harbour Engineering Asia World Co, Ltd.

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.

Asia 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.

VINCI’s 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.

Bouygues 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 Management.

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 Republic.

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 record.

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 Asian nations.

The development of Myanma Airways in conjunction with the Myanmar’s airports seems like an ideal fit, but has yet to be fully realised.

“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
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