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Koh Pha Ngan airport developer seeks loans

Koh Pha Ngan airport developer seeks loans

SURAT THANI: The developer of the first airport on Koh Pha Ngan, home of the full-moon party, is seeking a capital injection of B1.5 billion to complete the facility.

constructionlandtransporttourism
By Bangkok Post

Monday 5 September 2016, 09:04AM


A rendering of the proposed airport on Pha Ngan island, home of the full-moon party. Numerous issues have delayed the airport’s opening. Photo: via Bangkok Post

A rendering of the proposed airport on Pha Ngan island, home of the full-moon party. Numerous issues have delayed the airport’s opening. Photo: via Bangkok Post

Kannithi Aviation (KA), which operates commuter carrier Kan Air, is in talks with a few foreign financiers for soft loans to finish the airport, as costs have run up to about B2 billion.

President Somphong Sooksanguan said that the company had opted to acquire funds via loans rather than a joint venture to ensure that the project can proceed more smoothly.

The company is seeking foreign loans, which incur only 2 per cent annual interest compared with the 7% charged by local banks, to help drive project costs down, he said.

Kannithi Aviation is moving to tackle the financing issue in anticipation that Thai authorities will endorse the environmental impact assessment (EIA), a major prerequisite for starting construction on such projects, by year-end.

The company has already spent some B500 million in acquiring about 200 rai of land on Thailand’s fifth-largest island, with some land grading having already been carried out.

Mr Somphong said the funds will go towards further land grading, building a passenger terminal capable of processing 1,000 passengers a day and a 1,095-metre runway which can accommodate turboprop aircrafts in the size range of the ATR 72-600 series.

If everything goes according to plan, the airport will be up and running by the end of next year, he added.

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The project, originally estimated at B900 million, has faced inflated costs, delays resulting from the EIA and other complications, which pushed back initial plans to open in 2014.

Once operations get under way, the airport will be open to commercial airlines as well as Kan Air. It is set to provide direct air access to Koh Pha Ngan island for holidaymakers, especially international revellers attending the world-renowned full-moon party.

Currently visitors can only reach the island by ferry, either from Surat Thani, which is 55 kilometres awa, or Koh Samui, which is 15km away. Bangkok Airways operates an airport on Koh Samui, Thailand’s third-largest island.

Once it is completed and regular services are launched, Pha Ngan airport will siphon away some air traffic from Koh Samui, particularly foreign tourists heading for the full-moon party and those seeking a less crowded alternative to Samui.

Lying north of Koh Samui and two-thirds its size, Koh Pha Ngan has beautiful beaches and less expensive accommodation than its neighbour.

Read original story here.

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Kurt | 06 September 2016 - 11:15:46

Swerv:  I know that the original building costs of B900 million have gone up to B2billion. You not need to repeat that.
I know that project not started yet to build as they are 'waiting' for 'the EIA to be issued'.(does that take more than 6-7 years?) 
You not need to repeat that.

Questions still remain:
Was the budgetting, building schedule done by kinder garden?
Running ou...

yvonne | 05 September 2016 - 15:41:20

Will  open up the area more. Bangkok Air will have to drop their "expensive Airfares" to Koh Samui which they have controlled since they built the Airport there and have enjoyed TOTAL Monopoly. It is a shame Koh Samui is already overdeveloped and now surrounding Islands will become the same.Seems as if the Thais want to allow their Islands eventually each become one big City and all for ...

swerv | 05 September 2016 - 14:54:43

Kurt: The original overall cost was budgeted at 900mthb but has now increased to 2bn.
500m has been spent on acquiring the land which would be about 2mthb per rai plus grading.
The project has NOT started to build yet because they are waiting for the EIA to be issued.
Your comment: Costs have run up to B2 Billion? 
For what? Just land buying and partial grading?

NO, the total cost is for bu...

Kurt | 05 September 2016 - 11:50:44

Require B1.5 Billion ?
For a interest rate of 2% only instead of 7% ( by thai banks).

More than land buying and a bit of landgrading has not been done yet.
We can not call this project as something 'to finish it', it hardly started.
Only B500 million have been spend ( of the B900 million).
Now we read about inflating costs ( was not foreseen?) and delays resulting from the EIA ( sho...

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