Two Japanese companies, along with local firm Yoma Development Group Ltd, will renovate, operate and maintain Mandalay International Airport for 30 years in a deal announced last week.
Mitsubishi Corp, JALUX and Yoma signed the deal with the Department of Civil Aviation (DCA). The concession agreement is set to go into effect in March 2015.
The project is the first in which Japanese companies are involved in 100 percent private equity airport operations abroad, Mitsubishi said in a statement.
Shares in the newly created company, MC-Jalux Airport Services Co Ltd (MJAS) are to be divided between the three companies, with 45.5 percent going to Mitsubishi, 45.5 percent going to JALUX, and 9 percent to Yoma.
MJAS will undertake the operation, rehabilitation and maintenance of airport facilities, including terminal buildings and runway, however, air traffic control will be retained by DCA.
Mandalay Airport is a regional air hub, with four international connections and 11 domestic links. Since 2010, domestic passenger traffic through Mandalay has been increasing by 20 percent per annum, reaching a 60 percent annual growth in terms of international flights.
The airport is the largest in Myanmar, and one of only three international airports in the country beside Yangon and Naypyitaw. It also features the longest runway, 4,267 metres, in Southeast Asia.
The airport upgrade, at a cost of $100 million, is aimed at creating direct transportation of goods to countries in Asia and Europe, according to DCA.
The airport has the capacity to handle 3 million passengers per year, but only handled 750,000 in 2013 – 560,000 of them international visitors.
This is part of a larger effort to privatise and upgrade Myanmar’s airports, a plan which includes building a new airport north of Yangon.
Mitsubishi said the aim of the new venture is to generate further expansion of domestic and international flights to Mandalay, and consequently increase passenger traffic.