Govt plans $300m fast-track project to turn Chattogram airport into regional air hub

Highlights:

• Project targets regional connectivity, cargo growth and wider aircraft operations
• ADB financing has been sought under its growth network initiative
• First phase includes runway, terminal, transfer centre and cargo upgrades
• Future phases could add rail links, second runway and MRO facilities
• Experts stress airline incentives, competitive costs and economic viability

The government plans to transform Chattogram airport into a regional aviation hub through an 18-month fast-track project involving runway expansion, wide-body aircraft facilities, a new cargo village, cold-chain facilities, and a regional passenger transfer centre.

Estimated at $280-$300 million, the project aims to increase passenger and cargo capacity while improving Shah Amanat International Airport's connectivity with South Asia, Southeast Asia, the Middle East, and China.

The Economic Relations Division (ERD) has already requested the Asian Development Bank (ADB) to include the proposed Chattogram Regional Air Hub Project under its Integrated Growth Network Development initiative for development financing.

In the letter, ERD said a preliminary development project proposal (PDPP) had been prepared to address key infrastructure and operational constraints at the airport.

The ERD has also sent the proposal to the Ministry of Civil Aviation and Tourism and the Civil Aviation Authority of Bangladesh (CAAB) for necessary administrative action.

ERD Secretary Md Shahriar Kader Siddiky told The Business Standard that the government had taken a preliminary decision to pursue the plan.

"We are working on the initial decision to transform Chattogram airport into a regional air hub. The cost and other requirements have not yet been finalised," he said.

"Discussions have started. We have requested the Civil Aviation Authority to submit a proposal. We want to move as quickly as possible, particularly to improve cargo handling."

Fast-track phase

According to the draft PDPP, the first phase, described as the Quick-Win Phase, would establish a minimum viable regional hub capable of handling wide-body aircraft, transfer passengers, and increased air cargo.

Infographic: TBS

The phase is estimated to require around $250 million in public investment, with $175 million sought from development partners, primarily the ADB. The government and CAAB would provide the remaining $75 million.

A further $30 million to $50 million could be mobilised from private investors through a 20-25-year public-private partnership model for commercial and hospitality facilities.

Runway, terminal expansion

The airport currently has a 2,940-metre runway, two passenger boarding bridges and 11 narrow-body aircraft stands. Its annual cargo-handling capacity is around 40,000 tonnes.

The proposed first phase would allocate around $115 million to airside infrastructure, including a full-length parallel taxiway, rapid-exit taxiways, runway strengthening and a targeted extension towards an eventual length of up to 3,600 metres.

Six to eight wide-body aircraft parking stands would also be built. 

The upgraded runway would facilitate Boeing 777 and 787 and Airbus A330 and A350 operations, according to the project document.

Another $43 million would be spent on passenger terminal expansion and boarding facilities. Of this, $25 million would expand and reorganise the terminal to handle 8-10 million passengers annually, compared with its current capacity of around 5 million.

Four additional boarding bridges would raise the total to six, with at least four designed for wide-body aircraft.

The project also proposes a $10 million regional transfer centre with dedicated transfer security, immigration counters and transit lounges, allowing the airport to handle international transfer passengers rather than primarily point-to-point traffic.

Cargo capacity to more than double

The government plans to substantially expand air cargo facilities, allocating $25 million for a dedicated cargo village, cold-chain facilities and bonded warehouses. The aim is to raise annual cargo-handling capacity to 75,000-100,000 tonnes from around 40,000 tonnes.

Another $8 million would be spent on wide-body freighter aprons and ground-support equipment, while $19 million is earmarked for digital and safety upgrades.

These upgrades would include an automated Chattogram Airport Single Window connecting Customs, CAAB, airlines and logistics operators, as well as improved navigation, instrument landing and rescue systems.

The project also includes $10 million for ground transport facilities, including a multimodal passenger transport centre.

Future plan

The master plan would reserve corridors for future transport links, including an elevated airport expressway, dedicated railway connection and a cargo corridor linking the airport with Chattogram Port and nearby economic zones.

Beyond the first phase, Phase 2 is estimated to require $400-$600 million, while Phase 3 could cost $700 million to $1 billion.

A later phase could include a second runway, an aerospace maintenance, repair and overhaul campus and passenger-handling capacity of 20 million to 25 million annually.

Group Captain Mohammed Nur Hossain, director of Chattogram airport, said transforming the airport into a transit or regional aviation hub will depend largely on airlines.

He said the airport can currently accommodate additional flights, including two to three cargo flights a week, but airlines must come forward with viable operations. 

"The airport could emerge as an alternative hub if airline connectivity and supporting facilities are developed," he added.

Transit operations require airlines to have sufficient passenger demand from the originating country to pick up passengers in Chattogram, making technical stops for refuelling, catering and crew rest a more feasible starting point.

Business community seeks incentives

On 15 August, Chittagong Chamber of Commerce and Industry sent a letter to the finance minister seeking measures to better utilise the airport as a regional logistics hub.

In the letter, chamber president Amirul Haque said Chattogram has the port, industrial base and infrastructure to serve as a regional aviation and logistics gateway, but the airport remains underutilised.

It proposed 24-hour operations, a 40% preferential tariff for international routes and allowing passengers to board and disembark during long-haul stopovers. 

It also sought transit and refuelling facilities, plus a cargo village and ICD/CFS near the airport under PPP, BOO or BOOT models.

Questions over economic viability

Economists have questioned the proposed aviation hub's economic viability, citing underperformance of several major projects in Chattogram. They said the Karnaphuli Tunnel and elevated expressway have fallen short of projected traffic, while the National Special Economic Zone in Mirsarai has failed to attract expected foreign investment.

Infograph: TBS

Naim Hasan Chowdhury, economics professor at the University of Chittagong, said the government must focus on developing and operating the economic zones at full capacity.

"If they fail to attract foreign investment, the aviation hub may not deliver the expected results, much like other mega projects in Chattogram," he said.

Aviation expert Wing Commander (retd) ATM Nazrul Islam said Chattogram's status as the country's commercial capital and its port's role in international trade provide strong grounds for developing the airport into an aviation hub.

However, he said infrastructure alone would not be enough without effective marketing and competitive incentives for foreign airlines.

"Landing charges and fuel prices at our airports are among the highest in the world. Under existing policies, it will not be possible to turn Chattogram airport into an aviation hub," he said, urging the government to review its policies alongside infrastructure development.