DILI, 15 december 2022 (TATOLI) – Minister of Finance, Rui Augusto Gomes said the President Nicolau Lobato International Airport Expansion Project is critical for Timor-Leste’s economic growth and social development.
Gomes considered the renovation of the airport as an investment that has a social dimension too: “It will create jobs and boost the national economy. It will break the isolation of our island. It will elevate our image in the region.”
“It will gradually reduce the cost of transport; as passenger numbers grow, the cost of transport is expected to go down,” Gomes made the comments following the signing ceremony of the loan and grant agreements between Timor-Leste and Australia, worth US$73.36 million for airport revamp, in Dili, today.
“The expansion of the development partnership between Timor-Leste and Australia hits an upward value of $73.36 million, with a significant concessional loan of US$45 million, to fund a strategic project that is driven by the needs and priorities of the Timorese People and the Government of Timor-Leste.”
He said the expectation is that the renovated airport will increase the traffic of passengers to one million by 2050, which is a five-fold increase from the current average: “This seems to be a realistic expectation, as many Australian visitors would prefer to spend few nights in Timor-Leste rather than in places that have reached close to 100% saturation.”
“With a significantly improved airport, and given our strategic location between Asia and the Pacific, Timor-Leste can tap into a larger market opportunity for the benefit of its economic diversification by becoming a transit aviation hub as well as a cargo hub. This will help the country to develop tourism and freight businesses, which have significant multiplier effects on the economy as a whole,” he explained.
Timor-Leste aspires to achieve an upper-middle income country, which will require a GNI per capita of US$4,000 by 2030. In 2020, GNI per capita was only US$1,807.
“The implication is that the economy will have to grow at a much higher rate over the next decade and that high growth rate will have to be sustained. Aspiring for a higher GNI per capita in the face of lower income from petroleum in 2030, requires a transition from public to private-led investment, along with human and physical capital accumulation and significant productivity improvements,” he said.
Gomes emphasized that therefore, the diversification of the economy through the development of the services sector is essential for sustained growth.
Timor-Leste, in “principle”, has just been admitted as the 11th member of ASEAN. The renovated and secure airport will enable the country to accommodate larger numbers of passengers.
Timor-Leste has signed Air Services Agreements with Australia, Indonesia, Singapore, Portugal, Qatar, New Zealand, and Brunei.
Qantas has launched daily flights between Darwin and Dili, making it the first new ongoing international route from Darwin since 2008. Certainly, this will potentially promote businesses and family connections.
“For the first phase of the project, we have secured a US$135 million loan from the Asian Development Bank to upgrade the runway, taxiways, apron, traffic control tower, and aeronautical lighting system. In January next year, we will secure an approximately $40 million grant from JICA to build the new Airport Terminal,” he added.
“We have also secured $17.5 million in the State’s budget to co-finance some activities, including compensation to those families affected by the project, consultancy services, demolition works, etc.”
He concluded that the signing of the loan agreement worth US$45 million, and grant agreement worth US$28.36 million from the Australian Government through the Australian Infrastructure Financing Facilities for the Pacific (AIFFP), will improve facilities at the President Nicolau Lobato International Airport to serve both current and larger aircraft operations and will have the capacity to support broader sectoral development initiatives including tourism, agriculture and health management at border entry points.
Journalist: Filomeno Martins
Editor: Nelia Borges
