HCM City (VNS/VNA) — The Government has proposednaming the State-owned Airports Corporation of Vietnam (ACV) as themain investor for the first phase of Long Thanh International Airport inthe southern province of Dong Nai.

As authorised by the Prime Minister, Minister of Transport Nguyen Van The hassubmitted a feasibility report on the first phase of the airport at a costof 111 trillion VND (4.779 billion USD) to the National Assembly (NA).

“If the proposal is approved by the NA, construction of the airport can beginin the first quarter of 2021,” said Lai Xuan Thanh, Chairman of ACV.

According to the report, ACV, which runs 21 airports nationwide, will invest inthe first runway, taxiways, a terminal, an aircraft parking space and othermajor infrastructure at the airport.

ACV will need to raise about 98 trillion VND (4.19 billion USD) for theproject. It is set to have 36.6 trillion VND (1.57 billion USD) by 2025, or 37percent of the investment. It has been working with 12 domestic andinternational organisations to borrow the remaining at an interest rate of5-5.5 percent a year with a loan term of 15 years.

In addition, the Government has also proposed naming the Vietnam AirTraffic Management Corp (VATM) as the investor of the control tower andother safety features. VATM would need to raise an estimated 3.22 trillionVND (138.8 million USD) for the purpose. 

VATM already has 2.12 trillion VND (91.38 million USD), or 66 percent, ofthe needed money. VATM would borrow the rest from local creditinstitutions with an interest rate of 11 percent a year.

“We are confident that we will manage to find enough capital for theproject. But there’s still a long road ahead. It will take a longtime to invite bids for technical designs of the airportbefore construction,” he said.

In addition, the Government has proposed building two additional roads toenhance better connections between the city and the new airport.
The Government has alsoproposed increasing the first-phase construction area by 55 percent from1,165ha to 1,810ha to add more structures such as cargo storage and a cargoterminal, and to clear the area for a future second runway.

However, the total area for the airport in all phases remains unchanged at5,000ha as approved by the NA.

Experts said that theGovernment should carefully consider its proposal to name ACV as the maininvestor since there will be no other competitors. 

They said that Vietnamshould invite bids to build its largest airport instead of handing it overto a State-owned firm. The investment is far beyond ACV’s capacity,which might lead to financial risks.

Asking investors to bid for the project is a better option to ensuretransparency and effectiveness in such a massive project, they said.

According to the Ministryof Transport, Long Thanh airport requires careful preparations so that theproject can kick off in 2021 and be completed in 2025.

The ministry has asked the NA to issue a resolution to approvethe feasibility report for the project.

The airport was approved by the NA four years ago, but funding has remained abig question, even as construction of the first phase is set to start nextyear.

The airport will bebuilt in three phases over three decades, and is expected to become thecountry’s largest airport.

The first phase isscheduled for completion in 2025, when the new airport will be able to handle25 million passengers a year. 

The next two phases willrun from 2030 to 2035 and from 2040 to 2050.

Once completed, it willhave an annual capacity of 100 million passengers and five million tonnes ofcargo.

The three phases areestimated to cost 5.4 billion USD now, but experts have warned this coulddouble if the project is delayed by five years.

Located 40km to the east of HCM City, Long Thanh airport is expectedto relieve overloading at Tan Son Nhat International Airport in HCMCity, the country’s largest airport.

Vietnamese airports served 103.5 million passengers last year, up 11 per centfrom 2017, according to ACV./.