Korea And Japan Win Myanmar Airport Tenders - Incheon (IIAC) To Build Hanthawaddy Airport And Mitsubishi (8058) To Improve Mandalay Airport

Myanmar has announced tender winners for its airport developments – South Korea’s state-run airport operator is charged with building Hanthawaddy International Airport near Yangon, while Japan’s Mitsubishi Corp (TYO:8058) has been given the opportunity to improve and operate Mandalay International Airport.

A consortium led by the Incheon International Airport Corp (IIAC) has been chosen as the preferred bidder to construct Myanmar's Hanthawaddy International Airport, the second hub serving the country’s commercial center Yangon, Myanmar’s Department of Civil Aviation said, according to Mizzima, an India-based Myanmar news outlet.

The final contract for the $1.1 billion project will be signed at year end South Korea’s transport ministry said in a statement on Sunday confirming IIAC’s successful bid for the contract.

Hanthawaddy International will be located about 50 miles northeast of downtown Yangon and will be capable of handling about 12 million passengers annually, the South Korean transport ministry said. IIAC, which includes four South Korean construction firms, is scheduled to finish building the airport by 2018 and will be allowed to operate the property until 2067, at which point the right to operate will be handed to the Myanmar government.

The country’s main airport, Yangon International Airport, will be upgraded to accommodate six million passengers per year, up from its current capacity of 2.7 million passengers, Mizzima reported.

Another of Myanmar’s major airports, Mandalay International Airport, will also be upgraded and rehabilitated. The contract for the project has been awarded to a consortium consisting of Japan’s JALUX Inc. (TYO:2729), and Mitsubishi Corporation, along with SPA Project Management Ltd., a Myanmar company. The consortium has been granted a Rights of First Refusal contract from the government to improve the existing airport and a 30-year term for managing operations, according to Yahoo!.

Located in central Myanmar, Mandalay Airport serves as a domestic hub currently, with routes connecting 12 major cities within the country. Passenger traffic at the airport is currently seeing an annual growth of 20 percent, serving 80,000 international and half a million domestic passengers in 2012. Further increases in demand are expected given the increasingly popular tourism trade in Myanmar, Yahoo! reported.

It’s no secret that Myanmar is drumming up its tourism sector with new hotels and new airports to meet the rapidly increasing number of tourists visiting the country each year, which is projected to reach 7.5 million annually by 2020.

Both Japan and Korea have been investing in Myanmar in recent months - Japan has began to build Thilawa Special Economic Zone at a port near Yangon, and South Korea has agreed to lend $500 million to Myanmar for development purposes between 2013 and 2017.