Iraq airports financing plan

$17bn: Iraqi government

$43bn: investors

Source: MEED

Iraq is planning to spend more than $60bn on upgrading its airports and aviation infrastructure as part of the Iraqi National Aviation Plan.

The 10-year plan involves upgrading the infrastructure and facilities at existing airports as well as constructing new airports across the country.

Most of the proposed investment will be spent on the rehabilitation and upgrade of Baghdad International airport. This is expected to cost $51bn, says Ali Jawad Khadum, director of Baghdad airport. Once the budget is secured, the project will need a 1 million-strong workforce, which will create job opportunities for many Iraqis. In 2010, 600,000 passengers travelled through Baghdad airport.

However, the blueprint for the airport is extensive and does not just involve upgrading the terminals. The plans for Baghdad will be executed in five phases up to 2030. Later phases will involve building cargo terminals, an airport city, logistics and warehousing facilities and hotels. The first phase will run until 2014 and will include the rehabilitation of the existing three terminals and the runway. Two of the terminals are currently operational, while the third was destroyed during the war. The third terminal will need a complete overhaul of all of the infrastructure, including the terminal itself, lighting, access roads and transit. Khadum says he hopes the construction tenders will start to be put together by the end of 2011.

Another major airport expansion is that of Irbil International airport in the northern Kurdistan region. Irbil International airport saw a total of 454,000 passengers and 10,619 tonnes in 2010. This is expected to increase to 600,000 passengers in 2011. An ambitious masterplan has also been drawn up that will see the airport expand further to incorporate an airport city. The Irbil International Airport Masterplan 2030 will feature hotels, a cargo city, maintenance, repair and overhaul (MRO) facilities, flying academies, office and retail facilities, a convention centre, theme parks, hospital and clinics, a warehousing and logistics city and golf course.

A new international airport is also planned for Duhok, which is most northern region in Kurdistan. The airport will have a capacity of one million passengers a year and will provide a hub for visitors to the tourist sites in Duhok.

The future development of Suleimaniyah airport over the next 20 years will also see the passenger capacity increase to 3.5 million from 200,000 in 2010. The expansion will also include the construction of a cargo terminal, warehouses and additional aprons. Other expansions are planned or under way at Kirkuk airport, Basra and the Middle Euphrates International airport in Karbala.

The government itself says it will invest $17bn towards the total cost with the remaining $43bn to be attracted and secured for the plan to take place at all.

Abdulaziz al-Wandawi, ex-director of the Iraqi Civil Aviation Authority, says that in the past the government has been a roadblock to physically implementing the plan.

“The federal civil aviation authority has done nothing to develop the Iraqi National Aviation plan … there are no cargo statistics in Iraq at all,” says Al-Wandawi.

Although there have been no existing statistics for cargo volumes at Iraqi airports, the government has set itself a target of reaching 700,000 tonnes a year (t/y) by 2016 at Baghdad International airport.

Total passenger traffic into Iraq is forecast to be 22.5 million by 2016, rising to more than 25 million passengers a year by 2022. By this point, freight is tipped to reach 900,000 t/y.

Donald Galvanin, sales director for Middle East, Central and South Asia for Boeing, says Iraq is now starting to think about the future of its freighter market.

“What is Iraq’s freight market requirements? There is no data. For a greenfield [industry], there is an opportunity to build this up and companies stand to make a lot of money. But in Iraq, the ports are functioning and there is overland transportation, so how much need is there for air freight?” says Galvanin.

Boeing has a $5bn deal with Iraq to deliver 40 aircraft and is also investing several million dollars in know-how to help Iraq rebuild its aviation infrastructure.

The authorities will need to reorganise Iraqi airspace, attract more manpower, develop a legal framework for the sector and will also need to attract investors that are willing to drum up the shortfall in the required budget.