Incheon International Airport Corporation (IIAC) will be building infrastructure — including a cargo terminal — at the Batam Hang Nadim Airport on the Riau Islands, close to Singapore, along with an Indonesian partner.
Centre for Aviation (CAPA) said in a new analysis that it took a "long time to be finalised, but the concession contract to operate a small but ambitious Indonesian airport has been executed involving IIAC and a local partner."
The contract was for the construction, expansion and operation of Batam Hang Nadim Airport over a 25-year period.
"The Batam Hang Nadim Airport, very close to Singapore and Malaysia, is viewed as a potential reliever for Jakarta’s capacity-crunched airport, even though it is 850km away by air," CAPA said.
It added that within a US$500 million package a new terminal will be built.
Plans to become a cargo hub
"This new cooperation will include maintenance of the airport's existing passenger terminal and new passenger terminal, as well as management of its new cargo terminals and a master plan for a logistics 'aerocity,'" the aviation market intelligence firm added.
"The airport will also be developed to become a wider aviation destination hub and a logistics and cargo hub in western Indonesia."
The project will require an estimated investment of KRW600 billion and initial works should be completed by December 31, 2023.
Current capacity is five million passengers per annum and is expected to increase to eight million, then eventually to reach 20 million per annum.
IIAC president and CEO Kyung Wook stated that the cooperation agreement was South Korea's first long term public private cooperation project overseas.
Batam Hang Nadim is the ninth busiest airport in Indonesia and 316th biggest in the word (out of 3782) as measured by seat capacity.
