Singapore firm heads group that will develop project in one of Asia’s key growth markets
SINGAPORE — A consortium led by Yongnam Holdings has won a US$1.4 billion deal (S$1.78 billion) to build a new airport in Myanmar, the latest in a series of global deals as the South-east Asian nation opens itself up after decades of isolation.
The deal — which comes only weeks after Oversea-Chinese Banking Corp and United Overseas Bank notched a breakthrough by receiving preliminary approval for a coveted licence to operate in Myanmar — underscores the influence and competency of Singapore firms as the former military dictatorship continues its economic opening to become one of Asia’s key growth markets.
The consortium, which includes Changi Airport Planners and Engineers and Japan’s JGC, will develop the Hanthawaddy International Airport, Myanmar’s civil aviation agency said yesterday.
The group was invited to rebid for the project after negotiations between the government and South Korea’s Incheon International Airport Corp, which was previously given the deal, broke down earlier this year.
Airport upgrading is part of the government’s effort to create jobs in one of Asia’s poorest countries. The United States eased sanctions on Myanmar in 2012 and the European Union and Japan wrote off loans owed by the nation, following which Coca-Cola, PepsiCo and Unilever announced investments.
The new airport is about 80km from Yangon, while the current Yangon International Airport is 15km from the city.
The facility will be operational in December 2019 and will be able to handle as many as 12 million passengers a year, compared with the current airfield’s capacity of 2.7 million, the civil aviation agency said.
The consortium can get official development assistance from the Japanese government with low interest rates, said Mr Win Swe Tun, director-general of the Department of Civil Aviation, at a press conference. The group did not ask for any government guarantee, he added.
Yongnam shares surged 6.4 per cent in Singapore, the most in more than six months, before the company asked for a halt in trading.
Spurred by political and economic reforms in the past few years, tourist arrivals to the country have almost exceeded the capacity of existing facilities in Yangon, Mandalay and the capital of Naypyitaw. Myanmar may need to spend about US$320 billion on infrastructure by 2030 to lift economic growth to 8 per cent, said the McKinsey Global Institute.
Economic links between Singapore and Myanmar have been growing in recent years, with broad-based economic engagement established in areas such as telecommunications, hospitality, consumer and business services. The Republic is the fourth-largest investor in the country, with cumulative approved investments amounting to about US$3.8 billion as of January.
Bilateral trade between the two countries has enjoyed robust growth, increasing 71 per cent on-year to reach S$3 billion last year, making Singapore Myanmar’s third-largest trading partner. Agencies