Aug. 14 – This week Myanmar approved the Incheon International Airport Corporation’s bid for the construction of a US$1.1 billion airfield to be located within the country’s commercial center of Yangon.
The airport, to be called the Hanthawaddy International Airport, will begin construction next year under the management of Incheon, a Korean company with experience in the aviation industry that previously constructed the Incheon Airport in Seoul, South Korea. Construction is expected to be completed by 2018, and the airport will remain under Incheon’s ownership until 2067, at which time control of the airport will be transferred to the Burmese government.
The airport will be able to accommodate traffic of up to 12 million passengers each year – four times the current capacity of the Yangon International Airport.
According to a report released by McKinsey & Company this past June, Myanmar must invest US$230 billion dollars into its infrastructure by 2030 if it hopes to reach its long-run economic potential. Foreign investment will play a large role in financing the development of this infrastructure, a fact Myanmar President Thein Sein had in mind when he signed the country’s foreign investment laws last year to attract greater international investment from firms such as Incheon.
In addition to the new airport, Myanmar’s Mandalay International Airport will also receive infrastructure upgrades financed by a consortium of Japanese companies, which includes the Mitsubishi Corporation. Passenger traffic at the Mandalay International Airport has experienced annual growth of 20 percent, a trend that is expected to continue as the country targets 7.5 million visitors per year by 2020.
S&P aviation analyst Shukor Yusof commended the airport renovation and construction plans, noting that “Myanmar is the next big thing within ASEAN.”
Foreign direct investment (FDI) into Myanmar has increased greatly during the last decade, with Japanese, Korean, Thai and Chinese companies leading the charge to take advantage of investment opportunities in the country’s developing economy. Leading the way is China, with a cumulative investment of US$14.2 billion, followed by Thailand’s nearly US$10 billion investment.
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