Airport investor must use own funds, not rely on Gov’t: NA hinh anh 1A rendering of the proposed Long Thanh International Airport to be built in the southern province of Dong Nai (Photo courtesy of the Airports Corporation of Vietnam)

Hanoi (VNA) -
The National Assembly (NA) has issued a resolution that requires the investor of the proposed Long Thanh International Airport to use its own funds instead of money from the Government.

The NA’s Resolution 95/2019/QH14 states that the Government must ensure that the investor abide by principles of financial efficiency and national defence and security.

In a feasibility study submitted to the NA by the Ministry of Transport, the Government said it preferred to assign the State-owned Airports Corporation of Vietnam (ACV) as the investor for the mega airport project to be located in southern Dong Nai province.

The ACV, which manages 21 airports across the country, would invest in the first runway, taxiways, a terminal, an aircraft parking space and other major infrastructure at the airport.

It needs to raise about 98 trillion VND (4.2 billion USD) for the project. The ACV said it expected to have 36.6 trillion VND (1.57 billion USD) by 2025, or 37 percent of the investment. 

The ACV has been working with 12 domestic and international organisations to borrow the remaining amount at an interest rate of 5-5.5 percent a year with a loan term of 15 years.

However, lawmakers have expressed concerns over the financial capacity of the ACV to build the country’s largest airport, saying that it could add 2.63 billion USD to the public debt.

Vu Hong Thanh, Chairman of the NA’s Economic Committee, said that the ACV’s plan to borrow nearly 2.63 billion USD of the 4.2 billion USD needed for the project would likely be guaranteed by the Government, thus adding to the public debt. 

Because the ACV has already been tasked with expanding Tan Son Nhat International Airport and other airports, the Government should evaluate the ACV's ability to raise more capital, he added.

Long Thanh is a massive project that will affect national defence and security, and the appropriate investor must be chosen to assure efficiency and socio-economic development, according to Thanh. 

Ninety percent of NA deputies approved Resolution 95/2019/QH14 which addresses the feasibility report for a runway, terminal and other components in the first phase of construction, with the aim of serving 25 million passengers and 1.2 million tonnes of goods each year by 2025.

Total investment of the airport should not exceed 336.63 trillion VND (16 billion USD) as approved in June 2015, with the first phase costing around 111.69 trillion VND (4.8 billion USD), it said.

The NA also agreed to divide the national defence area of 1,050 hectares into two main parts. An area of 480 hectares will be used to develop the airport with military actions prioritised.

Under the NA resolution, two roads connecting the airport with Highway 51 and HCM City – Long Thanh – Dau Giay expressway will be added.

The Government is expected to build a transport system connecting the airport area with the Southern Key Economic Region.

The NA has also urged the Government to speed up land clearance for the huge project, saying that the current process was too slow.

The airport proposal was approved by the NA four years ago, but funding has remained a significant issue.

Construction was expected to start early next year. To be built in three phases over three decades, it would be the country’s largest airport.

The first phase is scheduled for completion in 2025, with a capacity of 25 million passengers a year. The next two phases would run from 2030 to 2035 and from 2040 to 2050. 

Once completed, it would have an annual capacity of 100 million passengers and five million tonnes of cargo.

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