Mitsubishi Corp. signs airport concession in Myanmar

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Mitsubishi Corp. signs airport concession in Myanmar

JALUX Inc., Mitsubishi Corporation (MC), and Myanmar's SPA affiliated group-company Yoma Development Group Limited, a wholly-owned subsidiary of Yoma Strategic Holdings Ltd., have signed a concession agreement with Myanmar's Department of Civil Aviation (DCA) to operate and rehabilitate Mandalay International Airport for 30 years.

Operations are scheduled to commence around March of 2015, based on the concession agreement concluded with DCA. The concession is for a period of 30 years.

The Mandalay International Airport, located 35 km south of Mandalay in Tada-U, is one of only three international airports in Burma. Construction of the airport began in 1996, and the airport was officially opened in September 2000 at a cost of US$150 million. The project was financed through a long-term loan from the Thai ExIm Bank.

Since 2010, domestic passenger traffic through Mandalay has been increasing by 20% per annum, reaching a 60% annual growth in the case of international flights. Mandalay, which has the capacity for 3,000,000 passengers a year, only serviced some 750,000 in 2013, 190,000 of those being domestic and 560,000 international.

The three companies have established a special purpose company, MC-Jalux Airport Services Co., Ltd. (MJAS) in Myanmar. JALUX and MC each holds 45.5% of MJAS shares, while YOMA holds the remaining 9%. MJAS will undertake the operation, rehabilitation and maintenance of airport facilities, including terminal buildings and runway (excluding air traffic control).

Specifically the project involves the operation, management and maintenance of all of the following service/work sectors of Mandalay International Airport:

  • Development of an airport master plan
  • Passenger Terminal Operations
  • Airside and Landside Operations
  • Ground Handling Facilities and Services
  • Catering Facilities and Services
  • Cargo Facilities and Services
  • Maintenance Services for pavement, visual aids, electrical systems and navigational aids and other facilities
  • Upgrading and expansion of the airport terminal and related facilities including expansion of the aircraft parking apron, according to the master plan.

JALUX has over 50 years of experience operating airport retail businesses (spanning some 27 airport facilities) as well as in the management, maintenance of airport facilities in Japan (as of October 2014).

MC will apply the wealth of experience gained in the construction and operation of airport facilities and other types of infrastructure development to the operation of Mandalay International Airport while YOMA will provide the project with real estate development expertise and established local expertise being a leading Myanmar corporation.

The project makes history as the first in which Japanese companies are involved in one hundred percent private equity airport operations abroad.

We have recently reported that a consortium led by Singapore's Yongnam Holdings Ltd. (YNH) has got the award of the Hanthawaddy International Airport concession in Myanmar. The total project investment is estimated at US$1.4 billion.

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