Of all the major projects bequeathed by the former government, Hanthawaddy Airport is one of the best candidates for a total rethink.
WHEN THE National League for Democracy took office in late March, one of its first moves was to penny-pinch in order to reduce the budget deficit.
This was a commendable goal, even if the main method of achieving it – reducing expenditure by cutting back on the number of ministers and deputies – had little real impact on the bottom line. It was more about sending a message and it seemed to work.
But given the focus on the fiscal position, why then is the government now announcing it will throw billions of dollars at an infrastructure project that is not yet needed, and may be fundamentally flawed?
No prizes for guessing that we’re talking about Hanthawaddy Airport.
First conceived by the military junta, Hanthawaddy has long been controversial. The location is hugely problematic – it’s not even in Yangon, but about 80 kilometres away on the outskirts of Bago. That’s a four-hour drive from downtown Yangon most days of the week.
Even taking into account that Yangon will grow along the northeast corridor toward Bago, it’s still a long journey – probably long enough to dissuade some tourists from visiting altogether.
When the former government announced the project, it did not clearly articulate why the Hanthawaddy site had been chosen over other candidates. There was also no clarity on how the government would ensure smooth transport to and from the airport – arguably the chief concern for prospective airport users, given the vast distances involved. Questioned about this by Frontier in January, government officials were still evasive.
The U Thein Sein government conducted a tender for the project, along with upgrades to existing airports at Yangon and Mandalay. Talks with the winning South Korean consortium broke down, though, and the tender was conducted again.
A consortium with a majority Japanese stake won. About half the construction cost will now be covered through a soft loan from the Japanese government. It’s fair to say that the full circumstances behind these developments have not been clearly explained to the public.
Of all the projects bequeathed by the former government, Hanthawaddy was certainly a prime candidate for a rethink.
It seems the Yangon Region government agreed with this sentiment. Chief Minister U Phyo Min Thein reportedly told Yangon Region MPs in December that Hanthawaddy was too far from Yangon and his government instead planned to build an airport in southern Yangon Region. This was later confirmed by Yangon’s minister for transport, Daw Nilar Kyaw, in a speech to parliament later in the month.
But the Union government appears determined to press on with Hanthawaddy. On December 21, Vice President U Henry Van Thio led the first meeting of the committee for the implementation of the project.
He said Hanthawaddy would be implemented during the current government’s tenure and was an “essential airport for the future” because of Yangon International Airport’s limitations, including lack of space, noise pollution and shared use with the military.
It was hard not to read the frontpage report in state media as a slapdown for the chief minister’s vision of a southern Yangon industrial hub.
The vice president did make a case for why Yangon will need another airport. He didn’t make a case for why that airport should be Hanthawaddy, though, and he certainly didn’t explain why it would be needed by 2022, the government’s new planned completion date.
Recent upgrades mean Yangon International Airport’s new capacity is 20 million passengers a year. In 2015, it welcomed barely 5 million, of which 1.7 million were international passengers. Growth in foreign passengers is forecast at less than 10 percent a year for the next five years. If domestic passenger numbers grow at a similar rate, the existing airport won’t reach capacity until around 2030.
There may be other factors that warrant a move to Hanthawaddy before capacity is reached at Yangon. If so, the government should explain exactly what they are. If the need to move to Hanthawaddy is particularly urgent, then it calls into question the logic behind the substantial and costly redevelopment at Yangon International Airport that has just been completed.
Because we are not talking about small change here. The first phase of Hanthawaddy, with capacity for 12 million passengers a year, was costed at about US$1.4 billion in 2014. The price tag will almost certainly have risen since then. Delaying it by even five years will free up a significant amount of money for other projects.
That is, of course, assuming that Hanthawaddy is the airport of the future that Yangon needs. Right now, that’s an open question.
This editorial first appeared in the January 26 issue of Frontier.