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Cablegate: Basrah International Airport: Great Transport and Commercial

VZCZCXRO9728
RR RUEHDA RUEHDH RUEHKUK
DE RUEHBC #0004/01 0401327
ZNR UUUUU ZZH
R 091327Z FEB 10
FM REO BASRAH
TO RUEHC/SECSTATE WASHDC 0965
INFO RUEHGB/AMEMBASSY BAGHDAD 0541
RUCNRAQ/IRAQ COLLECTIVE
RUEHMT/AMCONSUL MONTREAL 0004
RULSDMK/DEPT OF TRANSPORTATION WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMCSUU/FAA NATIONAL HQ WASHINGTON DC
RUEHBC/REO BASRAH 1003

UNCLAS SECTION 01 OF 03 BASRAH 000004

SENSITIVE
SIPDIS

STATE FOR EEB/TRA
STATE PASS US DEPARTMENT OF TRANSPORTATION
AMCONSULATE MONTREAL PASS US MISSION TO ICAO

E.O. 12958: N/A
TAGS: EAIR ECON ICAO EINV IZ
SUBJECT: BASRAH INTERNATIONAL AIRPORT: GREAT TRANSPORT AND COMMERCIAL
POTENTIAL, BUT SLOW GOING DEVELOPING THE SURROUNDING AREA

REF: 09 BASRAH 16

BASRAH 00000004 001.2 OF 003


Summary
-------

1. (SBU) Basrah International Airport (BIA) could play an
important role in facilitating economic growth in southern Iraq,
and become a force-multiplier for hydrocarbon, services, ports,
and other commercial activity. Relatively new and
under-utilized, the airport also connects to Iraq's rail, port,
and road infrastructure. Since 2005, BIA has seen increased
domestic, international, and charter flights. Service to more
cities is planned in the near future. Today, BIA is fully under
Iraqi civilian control, as the US military's presence
diminishes. Since the 2009 FAA technical assessment, BIA has
also addressed significant safety and security issues, moving
the airport closer toward compliance with international
standards. However, only modest progress has been made in
developing the surrounding area owned by the Ministry of
Transportation's Iraqi Civil Aviation Authority (ICAA). With
increased investor interest in Basrah, and security the best it
has been in five years, the time is ripe for continuing to push
the MOT toward facilitating private investment at the airport.
End summary.

Under-utilized airport, good transport links
--------------------------------------------

2. (SBU) Located around eight miles west of Basrah city and 30
miles north of the Persian Gulf, BIA was built in 1987, and has
been largely under-utilized ever since. Its single runway is
4,200 meters long and 23 meters wide, sufficient to handle
modern commercial air carriers including long-haul aircraft such
as Boeing 747s and Antonov cargo planes. The arrival gates,
lobby and waiting areas are modern and clean. Many first-time
visitors often express surprise at the airport's orderliness.
The terminal has five gates and parking stands for up to 12
aircraft directly in front of the terminal building. There is
also a seldom-used cargo hangar. BIA has good connecting
multi-modal transport potential. The airport is linked by good
roads to Baghdad (270 miles), Iran (18 miles), and Kuwait (32
miles). There is a rail station five miles away in downtown
Basra. Iraq's only deep-water Port of Umm Qasr is 30 miles
south via a good highway.

Increased commercial, charter, religious flights
--------------------------------------------- ---

3. (SBU) While air traffic is still light, frequency has
increased in recent years. BIA currently supports about 40
weekly scheduled civilian flights, by flag carrier Iraqi Airways
(IA), Royal Jordanian, and UAE-based Jupiter Airways to and from
Baghdad, Dubai, Amman, Erbil, and Sulemaniya. BIA and the MOT
recently announced that IA will start a twice-weekly direct
service between Basra and Beirut. Turkish Airways will begin a
twice-weekly Istanbul-Najaf-Basra service. UAE-based Skylink
Arabia will also soon re-start its three times per week route to
Kuwait. UAE-based Skylink Arabia handles all US military and
most commercial charter ground handling, passenger services, and
cargo. IA handles all such activities for scheduled commercial
flights.

4. (SBU) According to BIA management, three or four business
charters come to BIA daily, mainly from Dubai, Kuwait, Amman,
and Baghdad. During the December 2009 Hajj pilgrimage, around
4,200 passengers from Iraq, Iran, Jordan, and Kuwait traveled to
Saudi Arabia via BIA. Other religious pilgrimage charters
travel frequently to Shi'a religious sites in nearby Najaf and
Karbala.

US military presence diminishing
--------------------------------

5. (SBU) BIA was transferred to full Iraqi civilian control
January 1, 2009, and is run by the ICAA under the MOT. Prior to
that, the military had made changes to the airport in support of
their military operation. In recent years, UK and US militaries
used BIA in support of Coalition operations and had made
structural changes to the airport, some of which need to be
corrected before the airport can comply with ICAO standards.
However, since 2003, the US military has also provided about
$120 million in runway and infrastructure improvements and
trained Iraqi civilian staff. Two significant projects, which

BASRAH 00000004 002.2 OF 003


will improve the electrical services and runway, remain. US
military personnel have provided some air traffic control
services. Embassy Baghdad's Office of the Transportation
Attache (OTA) officials have urged the GOI and the air traffic
control manager to increase Iraqi-led hours of air traffic
control. OTA is currently working with the military and the
ICAA on all of these issues.

Important goal: Airport Certification, Compliance with
International Standards
--------------------------------------------- ----------

6. (SBU) Presently, even though some international carriers
operate from BIA, the airport has not been fully assessed for
compliance with international standards, specifically ICAO's
Standards and Recommended Practices (SARPs) or ICAA specific
standards in order to ensure that it meets minimum levels of
airport operations, safety and security. Such compliance could
help BIA attract more world class carriers and business,
although several carriers currently operate at their own risk
and extra cost. Compliance with ICAO standards or equivalent
set of standards as well as ICAA airport certification are
paramount goals of the airport and the ICAA. OTA is working
with ICAA to develop such capabilities, including a
certification program.

OTA and FAA assessment: Some deficiencies, but generally in good
shape
--------------------------------------------- -----------

7. (SBU) In March 2009, FAA, with OTA's assistance, conducted
site assessments of BIA's passenger operations and runway, as
they relate to ICAO standards. They also determined what steps
were necessary for eventual ICAA certification of BIA. The ICAA
Director General and BIA officials requested the assessment.
The FAA found BIA's terminal and runway structures, operations
and management to be in generally good shape. BIA is
underutilized and could handle greater traffic volumes. The
team reviewed terminal operations from the perspective of
inbound arriving and outbound departing passenger flow, from
airport entry to aircraft boarding and back, including customs,
immigration, and baggage claim. Ministry of Interior and ICAA
personnel share security responsibilities. Some facilities and
equipment improvements will likely be required in the medium
term to support expansion.

8. (SBU) In December 2009, The OTA team conducted an informal
assessment and found that improvements to the airfield are still
needed, but noted significant progress since the March 2009
assessment. They concluded the airfield appears to be well
managed overall. The runway, associated taxiways, and
operational areas are in good condition. Deficiencies remain
with the airfield electrical system associated with the runway
and taxiway lighting system, some incorrectly installed or
marked taxiway signs and paintings, and some fire fighting and
fueling operations. OTA also recommends that BIA update its
Aerodrome Manual, Safety Management System, and Aerodrome
Maintenance Program. BIA staff asked for OTA's assistance in
reviewing these programs, and OTA will consider this request.

Surrounding land ripe for commercial use; slow GOI response
--------------------------------------------- ----------

9. (SBU) US and local businesspeople and government officials
have long recognized the strong commercial potential of BIA's
surrounding land and infrastructure. They see the area, which
encompasses the Basra PRT, as a potential springboard for local
development which could accommodate the fast-growing oil sector.
PRT Basra is aware of several proposed foreign and local
investor development projects to develop hotels and offices from
existing buildings or to build new structures altogether. There
are also plans to create special economic zones, and plans to
privately manage BIA as a travel, cargo, logistics and
warehousing hub. In most cases, these proposals have already
received Basra Investment Commission investment licenses, but
still lack the needed final approval from the MOT/ICAA. MOT,
but more specifically ICAA, controls the land surrounding the
airport and has developed a Master Plan for Basra Airport called
Basra Airport City Masterplan. This plan was delayed due to
internal MOT deliberations regarding the best mechanisms to
engage investors.


BASRAH 00000004 003.2 OF 003


10. (SBU) There has been some recent movement. BIA officials
recently told PRTOffs that IA will soon be awarded the
concession rights for all airport properties and some
surrounding land. IA in turn could hire a private company to
develop these assets or construct new offices or hotels. BIA
officials also confirmed that the Italian oil company ENI (which
is partnering with U.S.-based Occidental and South Korea-based
Kogas to develop the nearby Az Zubair oilfield) is building a
small temporary office/housing compound adjacent to PRT Basra,
and within the MOT-controlled airport land. BIA officials said
that other parcels of similar land will be made available to
other firms. The Minister of Transportation has also informed
OTA that this is a priority and they are looking not only at
short term, but also long term development plans.

Comment: Additional steps are needed for BIA development
--------------------------------------------- -----------

11. (SBU) BIA and surrounding area holds great potential as a
force multiplier in any southern Iraq economic resurgence.
Sitting on top of seven percent of the world's oil reserves, and
with the best security situation in years, Basrah Province's
economy could be poised to take off. With such strong investor
interest, the time is ripe to make this fine airport the
transport and commercial hub it could be. The PRT, US Army, OTA
and investors continue to encourage ICAA/MOT to take advantage
of this unique opportunity. However, despite some small steps
in this direction, the ICAA/MOT have yet to be able to fully
overcome its bureaucracy and misgivings about private investment.
NALAND

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