Funding sought for airport projects

HCMC - Vietnam is looking for investment capital from different sources to fund new airport projects and expansions to bolster aviation industry growth, the general director of Airports Corporation of Vietnam (ACV) said. Passengers disembark from a Vietnam Airlines plane at Phu Quoc airport on the island of the same name off Kien Giang Province in this file photo. Vietnam is looking for capital from different sources to fund new airport projects and expansions - Photo: TL

Le Manh Hung told a conference of the U.S.-Vietnam Aviation Cooperation Working Group in HCMC on Thursday that the state-owned company would center resources on developing and expanding major airports until 2020.

Hung stressed most of the capital for airport upgrade and development previously came from the State budget and domestic companies, but in the face of falling State finances, the urgent need for modern infrastructure is a diversification of funding sources.

"The Government has a policy to call for investors into airport projects and we are implementing this,” Hung said. He is pinning high hopes that the conference would open opportunities for ACV to find partners to improve airports in the country.

"Besides local capital, we also focus on other sources and forms of investment such as build-transfer (BT), build-operate-transfer (BOT) and public-private partnership (PPP),” Hung told the conference about the possibility of PPP in the country.

"PPP would be a long-term policy,” he confirmed at the conference, whose opening speech was delivered by the U.S. Consul General in HCMC, Le Thanh An. Hung noted that to support strong growth of Vietnam’s aviation industry, it was important to have sufficient capital for infrastructure development at airports.

Deputy Transport Minister Pham Quy Tieu told the conference that this ministry had just established a management division for PPP projects, including airports. Tieu emphasized the conference would be of great help for the ministry to improve a framework of policies, priorities and incentives for PPP investments.

Hung said ACV would work closely with investors, partners over PPP investments. He told the Daily on the sidelines of the event that foreign investment would be an important source for airport projects in Vietnam. He did not clarify how much investment would be needed for new airports and expansions until 2020.

Several investors from the U.S. showed keen interest in the PPP format at the conference.

Michael Nguyen, representative of airports developer ADC & HAS in Vietnam, noted the PPP format for developing airports has become popular worldwide for long, but it is now being touted as an attractive investment form in Southeast Asia including Vietnam. Despite having the strong potential for PPP investment, Vietnam should have an appropriate regulatory framework to woo investors, he said.

Currently, many airports are being built or upgraded in Vietnam.

Long Thanh International airport in Dong Nai Province is one of the airports to be built until 2020. Lai Xuan Thanh, deputy director general of the Civil Aviation Administration of Vietnam (CAAV) told the Daily that the first phase of this project would need over US$7 billion and that its pre-feasibility study was being carried out.

According to the zoning plan already approved by the Prime Minister, the Long Thanh International Airport will be under construction in 2015 and be operational by 2020 when phase one is completed.

The airport will be able to handle 25 million passengers and 1.2 million tons of cargo every year in the first phase until 2020. The annual passenger handling capacity will be 50 million by 2030 and increase to 100 million afterward.

Hung said a second passenger terminal was underway at Noi Bai in order to improve the handling capacity of the international airport. The first terminal put into use in the early 2000s was designed for six million passengers a year but the number reached 11.5 million last year. That is why the second terminal is under construction and is expected to welcome 10 million passenger a year when it is commissioned by the end of 2014 and 15 million in the second phase.

ACV also has plans to upgrade the domestic terminal of Tan Son Nhat International Airport to enable it to receive 25 million in the coming years, from approximately 18 million a year currently.