Identifier
Created
Classification
Origin
06CHIANGMAI189
2006-10-31 08:25:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Consulate Chiang Mai
Cable title:  

AIRPORT EXPANSION UNPREPARED FOR EARLY TAKE-OFF

Tags:  PGOV ECON ASEC TH 
pdf how-to read a cable
VZCZCXRO4848
PP RUEHCN RUEHDT RUEHGH RUEHHM RUEHVC
DE RUEHCHI #0189/01 3040825
ZNR UUUUU ZZH
P 310825Z OCT 06
FM AMCONSUL CHIANG MAI
TO RUEHC/SECSTATE WASHDC PRIORITY 0314
INFO RUEHZS/ASSOCIATION OF SOUTHEAST ASIAN NATIONS
RUEHBK/AMEMBASSY BANGKOK PRIORITY 0584
RUEHCHI/AMCONSUL CHIANG MAI PRIORITY 0352
RUEHOO/CHINA POSTS COLLECTIVE
RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0002
RUEHKA/AMEMBASSY DHAKA PRIORITY 0001
RUEHCI/AMCONSUL CALCUTTA PRIORITY 0004
UNCLAS SECTION 01 OF 02 CHIANG MAI 000189 

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON ASEC TH
SUBJECT: AIRPORT EXPANSION UNPREPARED FOR EARLY TAKE-OFF

CHIANG MAI 00000189 001.2 OF 002


UNCLAS SECTION 01 OF 02 CHIANG MAI 000189

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON ASEC TH
SUBJECT: AIRPORT EXPANSION UNPREPARED FOR EARLY TAKE-OFF

CHIANG MAI 00000189 001.2 OF 002



1. (SBU) Summary. Chiang Mai International Airport rushed
to inaugurate a new international passenger terminal October 27,
reportedly to be ready for the grand opening of the Royal Flora
horticultural exposition on November 1. The hasty opening put
immigration controls back on manual operations, in the absence
of funds needed to transfer computers and other passenger
tracking equipment. Mandated three years ago by former Prime
Minister Thaksin Shinawatra and built by companies closely
associated with the former government, the new facility can
accommodate double the number of passengers now served. End
summary


2. (U) One month after opening Bangkok's new Suvarnabhumi
airport, Airports of Thailand (AOT) Managing Director Chotsak
Asapaviriya inaugurated a new international terminal at Chiang
Mai. The airport expansion, one of a number of construction
projects by which former PM Thaksin sought to boost his home
town, aimed to position Chiang Mai as the aviation hub of the
Greater Mekong Subregion (GMS). Although the existing facility
had not yet reached capacity and international passengers
currently constitute only ten percent of total arrivals, the
expansion provided room for 6.5 million passengers. The full 2
billion baht (USD 54 million) airport project is scheduled for
completion in 2007.

-------------- Security Left Behind --------------


3. (SBU) Despite the fact that Consulate and Department of
State officials touring the unfinished terminal in July were
told that the new facility would not be ready until January
2007, airlines learned on Oct. 16 that the new airport would
open eleven days later. Security procedures suffered in the
transition, as the PISCES traveler identification system funded
by the U.S. Government remained behind at the old terminal.
Days after the opening, international passengers were being
checked into the country manually, with information entered into
a computer system some time later. According to immigration
contacts, the holdup was lack of funding, with an estimated 1.7
million baht (USD 46,000) needed to transfer the system.

-------------- Construction Deals Tied to Thaksin --------------



4. (SBU) Consulate contacts in the construction business
revealed that all contracts for the expansion were awarded to
companies tied to former PM Thaksin's Thai Rak Thai (TRT) Party.
The most lucrative projects went to Sino-Thai Engineering and
Construction in Bangkok and Chiang Mai Construction Company,
associated respectively with former Deputy Minister of Public
Health Anutin Charnviraku and former Minister of the PM's Office
Newin Chidchob. Other bids were won by companies connected to
Thaksin's brother, former MP Payap Shinawatra, and former Deputy
PM Suwat Limpatapanlop.

-------------- China Connections --------------


5. (U) On the plus side, the airport expansion does provide
the infrastructure for future growth in Chiang Mai tourism,
trade, and services. The head of the Tourism Business
Association of Chiang Mai, Songvit Ittipatanakul, whose company
Standard Tours specializes in tours from China and Taiwan, told
the Consul General that several Chinese airlines, including
China Eastern, had visited Chiang Mai to "survey" the situation.
For now, he said, most Chinese tourists arrive in the north via
Bangkok, rather than on the twice-a-week flights to Kunming or
four-times-a-week connection to Jinghong in Yunnan province.
He urged AOT Director Chotsak to promote flights between
Shanghai and Chiang Mai.

-------------- Growing Air Cargo Business --------------


6. (U) The airport expansion also benefits Chiang Mai's
growing air cargo business, which generates 610 million Baht
(USD 16.5 million) sales volume annually, up from 410 million
Baht (USD 11 million) six years ago. Thai Airways Cargo Manager
Sucheep Hiranyapreuk reported that electronics parts being
exported from the industrial estate in nearby Lamphun make up
the bulk of this revenue. Major air cargo destinations are
Europe, Japan, Singapore and Hong Kong. Agricultural products
from southwestern China, such as shitake mushrooms, pass through
Chiang Mai for re-export to Japan; Sucheep also cited fresh
produce, flowers, and breeding dogs arriving from Kunming


7. (U) In addition to the new 15,450 square meter
international terminal, the project has increased parking,
expanded the cargo building and aircraft parking area, and
lengthened the runway to 3,400 meters; USD 15 million remains

CHIANG MAI 00000189 002.2 OF 002


for renovation of the domestic terminal, a fuel filling system,
and rapid exit taxiway. The airfield itself dates back to 1921,
when a Muslim immigrant from Yunnan donated land at the foot of
Doi Suthep for a runway. Occupied by the Japanese air force
during World War II, the field was strafed by the China-based
"Flying Tigers" American Volunteer Group in 1942. Commercial
passenger flights from Chiang Mai began in 1947.


8. (U) Currently Thai Airways International, China Airlines,
Bangkok Airways, Lao Aviation, Mandalay Airlines, Air Asia,
Tiger Airways, Silk Air (Singapore),and Hong Kong Express
Airways fly from Chiang Mai to Kunming, Taipei, Jinghong, Luang
Prabang, Rangoon, Mandalay, Kuala Lumpur, Singapore, and Hong
Kong. Combined with international passengers who transit
Bangkok, a total of 295,000 travelers per year pass through
immigration procedures in Chiang Mai. These international
arrivals account for slightly less than one-tenth of all
passengers using the Chiang Mai airport.

-------------- Following the Tourism Trail --------------


9. (U) Bangkok Airways, cited as the best example of a company
working to take advantage of Chiang Mai's location and tourist
appeal, operates direct flights to Jinghong in China's Yunnan
province, as well as Thai tourist spots Samui and Sukhothai.
The company plans to open a route between Chiang Mai and
Cambodia's Siem Reap but currently lacks enough aircraft.


10. (U) Twice-a-week flights to Hong Kong, started in June by
Hong Kong Express Airways, have done well so far, although the
company reports a decline in Thai passengers since the opening
weeks. The current timetable is more attractive for tourists
from Hong Kong than those from Chiang Mai, who find themselves
arriving in Hong Kong at 9 pm. Nevertheless, the airline plans
to introduce Boeing 737s on the route next year to accommodate
more passengers.


11. (SBU) Not all international flights have been
successful, however; a Thai Airways (TG) Chiang Mai-Chittagong
connection inaugurated in late 2002 closed three years later.
While TG cited a need to allocate aircraft to other routes, a
travel agent reported that the airline lost money as a result of
having to send back Bangladeshi passengers who arrived with
forged passports. The airport authority is now surveying
potential destinations in India.


12. (U) Comment. Even without Chiang Mai-booster Thaksin in
the driver's seat, his legacy of insider deals and unilateral
decision-making combined with genuine infrastructure
improvements lives on. While neither quite ready nor urgently
needed, the new airport facility bolsters Chiang Mai's claim as
the center of the Greater Mekong Subregion and positions it to
take advantage of further trade and tourism openings to China
and neighboring countries.
CAMP