Thailand’s Suvarnabhumi airport awards construction contracts-
In the backdrop of mounting traffic demand and overcrowding, Suvarnabhumi airport, touted as the tourism gateway to Thailand, has been warned of some severe capacity and safety concerns by the International Air Transport Association (IATA). The airport handles more than 50 million passengers annually, exceeding its maximum capacity of 45 million passengers, and started operating beyond capacity within a year of its opening in 2006. Finally, after a decade of delay, the airport’s Phase II expansion plans are moving forward, with contracts being awarded in August 2016.
Rising passenger numbers, increasing stress on capacity
Suvarnabhumi airport’s passenger traffic has been growing, recording a compound annual growth rate of 2.32 per cent between 2010-11 and 2014-15. Although the numbers are reflective of the growing importance of the airport as a popular air hub, unless capacity augmentation is immediate, it seems unlikely to maintain the growth. As mentioned earlier, the airport’s terminal is built to withstand annual passenger traffic of 45 million; however, the increase in demand has not been met by a simultaneous increase in airport capacity, thereby leading to attainment of saturation levels.
To add to the woes, IATA has recently named Bangkok as the only Asian city where passenger traffic congestion is critical and where the authorities’ efforts to address the situation have failed to meet the industry expectations.
In view of the inadequate capacity at the airport since its opening, expansion and development plans for the airport were announced in 2010, but with little visible results on the ground. During 2014-15, footfalls at the airport touched 52.4 million passengers, crossing the capacity by over 7 million passengers.
According to the Suvarnabhumi airport’s expansion plan, the airport capacity was to be increased to 60 million passengers per annum (mppa) by 2017. Further, in December 2011, Airports of Thailand (AoT) announced advancement of the expansion to 2016, one year ahead of its scheduled completion in 2017. However, as of August 2016, the project has seen limited physical progress.
Initial expansion plans
AoT had initially planned spending 62.5 billion baht (including 10 per cent for changes in price reserve and throughput, 7 per cent value added tax [VAT] and 1.76 billion baht interest incurred during the construction) to expand capacity at Suvarnabhumi airport to 60 mppa.
As per AoT’s plans, the project is to be developed under four components (see Table).
Although the airport expansion was approved by the Thai cabinet in 2010, progress has been far from satisfactory.
Current status
After a prolonged delay, AoT finally invited bids for construction works for Suvarnabhumi airport in June 2016. The work will be bid out under seven contracts, of which three were awarded in late August 2016.
The first contract, worth 12.05 billion baht, has been awarded to Italian-Thai Development Corporation Limited. The scope of work includes the construction of the concourse, new aircraft parking bays next to the terminal building, and the Phase I tunnel to the Midfield Satellite Building 1.
The second contract, worth 1.98 million baht, has been awarded to Chinese Grand International Advertising Link for developing and outsourcing infrastructure utilities systems.
The third contract, worth 879 million baht, has been awarded to SCS Consortium for supervising the construction work.
Construction work for the project is expected to begin by August 2017. Besides, the remaining four contracts will be awarded under open bidding by end-2017. Work on the automated people mover (APM) system is expected to begin in 2017.
Rising security and other concerns
Suvarnabhumi airport faced a number of difficulties in the very first few days of operation. Among these, sluggish luggage claims, delays in flights, and failures in check-in system were common. Suboptimal construction quality, congestion, signage, and other factors continued to plague the airport, prompting the March 2007 reopening of the Don Mueang International Airport (DMK) after renovation to divert some of the domestic traffic.
During 2014-15, there was a decline in domestic passengers at Suvarnabhumi airport witnessed on account of Thai Airways International losing its domestic passengers to low-cost carriers at DMK and due to the partial move of Thai Smile’s flights to DMK. This is reflective of the ongoing imbalance in the airport traffic at Suvarnabhumi airport.
Besides, as of 2016, the airport continues to face several issues, with a key one being rising security concerns. The International Civil Aviation Organization and Federal Aviation Administration had highlighted the non-compliance by Thailand’s airports with defined safety standards in 2015 and assigned Category 2 rating based on a reassessment of the country’s civil aviation authority.
Furthermore, IATA has also recently raised safety concerns around the soft spots on the tarmac, taxiways and apron area at Suvarnabhumi airport that have resulted due to the use of substandard materials. The additional power and towing required for manoeuvring through these surfaces poses a safety risk to ground personnel, ground vehicles and aircraft, necessitating immediate action.
The way forward
The criticality of aviation to Thailand’s economic success has not been hidden from the world. An important economic mainstay for the country has been tourism. According to IATA estimates, aviation and related activities contribute around 2 million jobs, generating $29 billion in gross domestic product.
However, amidst the growing ambiguity around the effective and “timely” implementation of the expansion plans of Suvarnabhumi airport and the simultaneous augmentation of demand owing to Thailand’s tourism boom, the situation seems grim. Although the Suvarnabhumi airport management has made some efforts in the form of rearrangements in check-in counters, setting up of additional self-check-in kiosks and opening centres to augment baggage handling to cater to growing crowds, these changes might not be sustainable in the long run. In this regard, facilitating the Phase II terminal expansion could help maintain tourism as a bright spot for the country’s economy.
In the short run, avoiding frequent tarmac, taxiway, and apron closures by resurfacing and refining the infrastructure can address the capacity constraints; curbing the addition of new flights until the realisation of airport expansion plans could also prove useful. A long-run solution would be working towards the plans for developing a third runway before traffic saturates on the second.
On the whole, a broader stakeholder consultation platform should be created to develop a cohesive, far-sighted strategy which will guide the development of the airport’s infrastructure and prevent further delays.
