Incheon Airport Corporation Wins Largest Ever 600 Billion KRW Contract for Indonesia Batam Airport Project

Batam Airport Development Rendering

[Asia Economy Reporter Dongwoo Lee] Incheon International Airport Corporation has entered the overseas airport operation and development business for the first time in Korea.

Incheon Airport announced on the 21st that it has won the public-private partnership development project for Hang Nadim International Airport (hereinafter Batam Airport) located on Batam Island, Indonesia. The project period is 25 years, with a record-breaking contract amount of 600 billion KRW. With this, Incheon Airport has become the first domestic airport to enter the operation and development business of an overseas airport.

After competing with world-renowned airport operators such as Zurich Airport in Switzerland, France's EGIS, and India's GMR, Incheon Airport was selected as the final successful bidder for this project by the Batam Indonesia Free Zone Authority (BIFZA), the client, on the 19th.

Through this project, Incheon Airport expects to diversify its revenue structure, which had been focused on commercial facility leasing such as duty-free shops, while expanding its airport territory overseas to create new air travel demand and secure momentum for sustainable growth.

Moreover, by cooperating with small and medium-sized enterprises, Incheon Airport plans to promote joint overseas expansion with domestic companies in key areas of airport operation and construction, such as exporting the common passenger processing system developed in-house to Batam Airport, thereby showcasing the excellence of the Korean-style airport worldwide.

The Batam Indonesia Free Zone Authority (BIFZA) recruited a developer and operator for Batam Airport through an international competitive bidding process as part of a strategy to develop the Batam area into a global logistics and tourism hub. The Incheon Airport Consortium, selected as the successful bidder, plans to renovate the existing passenger terminal and build a second passenger terminal by 2024 in collaboration with Indonesia’s largest airport operator AP1 and construction public enterprise WIKA, transforming Batam Airport into a competitive regional hub.

Batam, where the airport is located, was designated as Indonesia’s first free trade zone in 2009 based on its geographical advantage adjacent to Singapore. Currently, about 1,000 companies operate across 22 industrial complexes. Over the past five years, foreign direct investment (FDI) has reached 2.5 billion USD (approximately 2.7 trillion KRW), indicating significant growth potential in the air cargo market through the activation of the free trade zone.

Kim Kyung-wook, President of Incheon International Airport Corporation, said, “Winning the Batam Hang Nadim Airport PPP project is especially meaningful as it was achieved despite the global contraction in airport infrastructure investment and development projects due to COVID-19,” adding, “We will accelerate overseas expansion in airport development and operation fields based on this success and strengthen our position as a global airport operator.”

This content was produced with the assistance of AI translation services.